Correlation Between LB Foster and JOHNSON
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By analyzing existing cross correlation between LB Foster and JOHNSON JOHNSON 595, you can compare the effects of market volatilities on LB Foster and JOHNSON and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LB Foster with a short position of JOHNSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and JOHNSON.
Diversification Opportunities for LB Foster and JOHNSON
Very good diversification
The 3 months correlation between FSTR and JOHNSON is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and JOHNSON JOHNSON 595 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON JOHNSON 595 and LB Foster is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LB Foster are associated (or correlated) with JOHNSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON JOHNSON 595 has no effect on the direction of LB Foster i.e., LB Foster and JOHNSON go up and down completely randomly.
Pair Corralation between LB Foster and JOHNSON
Given the investment horizon of 90 days LB Foster is expected to generate 2.87 times more return on investment than JOHNSON. However, LB Foster is 2.87 times more volatile than JOHNSON JOHNSON 595. It trades about 0.1 of its potential returns per unit of risk. JOHNSON JOHNSON 595 is currently generating about 0.0 per unit of risk. If you would invest 1,066 in LB Foster on August 31, 2024 and sell it today you would earn a total of 1,764 from holding LB Foster or generate 165.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.21% |
| Values | Daily Returns |
LB Foster vs. JOHNSON JOHNSON 595
Performance |
| Timeline |
| LB Foster |
| JOHNSON JOHNSON 595 |
LB Foster and JOHNSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and JOHNSON
The main advantage of trading using opposite LB Foster and JOHNSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, JOHNSON can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JOHNSON will offset losses from the drop in JOHNSON's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| JOHNSON vs. Sabre Corpo | JOHNSON vs. LB Foster | JOHNSON vs. Chester Mining | JOHNSON vs. Inflection Point Acquisition |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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