Correlation Between LB Foster and NSTAR
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By analyzing existing cross correlation between LB Foster and NSTAR ELEC 44, you can compare the effects of market volatilities on LB Foster and NSTAR 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 NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and NSTAR.
Diversification Opportunities for LB Foster and NSTAR
Weak diversification
The 3 months correlation between FSTR and NSTAR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and NSTAR ELEC 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 44 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 NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 44 has no effect on the direction of LB Foster i.e., LB Foster and NSTAR go up and down completely randomly.
Pair Corralation between LB Foster and NSTAR
Given the investment horizon of 90 days LB Foster is expected to generate 3.58 times more return on investment than NSTAR. However, LB Foster is 3.58 times more volatile than NSTAR ELEC 44. It trades about 0.06 of its potential returns per unit of risk. NSTAR ELEC 44 is currently generating about 0.07 per unit of risk. If you would invest 2,395 in LB Foster on September 14, 2024 and sell it today you would earn a total of 464.00 from holding LB Foster or generate 19.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.2% |
| Values | Daily Returns |
LB Foster vs. NSTAR ELEC 44
Performance |
| Timeline |
| LB Foster |
| NSTAR ELEC 44 |
LB Foster and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and NSTAR
The main advantage of trading using opposite LB Foster and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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