Correlation Between LB Foster and ORACLE
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By analyzing existing cross correlation between LB Foster and ORACLE P 295, you can compare the effects of market volatilities on LB Foster and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and ORACLE.
Diversification Opportunities for LB Foster and ORACLE
Very good diversification
The 3 months correlation between FSTR and ORACLE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and ORACLE P 295 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE P 295 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE P 295 has no effect on the direction of LB Foster i.e., LB Foster and ORACLE go up and down completely randomly.
Pair Corralation between LB Foster and ORACLE
Given the investment horizon of 90 days LB Foster is expected to generate 0.97 times more return on investment than ORACLE. However, LB Foster is 1.03 times less risky than ORACLE. It trades about 0.29 of its potential returns per unit of risk. ORACLE P 295 is currently generating about -0.21 per unit of risk. If you would invest 2,416 in LB Foster on September 12, 2024 and sell it today you would earn a total of 446.00 from holding LB Foster or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 23.81% |
| Values | Daily Returns |
LB Foster vs. ORACLE P 295
Performance |
| Timeline |
| LB Foster |
| ORACLE P 295 |
LB Foster and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and ORACLE
The main advantage of trading using opposite LB Foster and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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