Correlation Between LB Foster and SOUTHERN
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By analyzing existing cross correlation between LB Foster and SOUTHERN PER CORP, you can compare the effects of market volatilities on LB Foster and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and SOUTHERN.
Diversification Opportunities for LB Foster and SOUTHERN
Good diversification
The 3 months correlation between FSTR and SOUTHERN is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of LB Foster i.e., LB Foster and SOUTHERN go up and down completely randomly.
Pair Corralation between LB Foster and SOUTHERN
Given the investment horizon of 90 days LB Foster is expected to generate 7.4 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, LB Foster is 17.19 times less risky than SOUTHERN. It trades about 0.1 of its potential returns per unit of risk. SOUTHERN PER CORP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,555 in SOUTHERN PER CORP on September 3, 2024 and sell it today you would lose (1,352) from holding SOUTHERN PER CORP or give up 12.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.72% |
| Values | Daily Returns |
LB Foster vs. SOUTHERN PER CORP
Performance |
| Timeline |
| LB Foster |
| SOUTHERN PER P |
LB Foster and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and SOUTHERN
The main advantage of trading using opposite LB Foster and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| SOUTHERN vs. Copa Holdings SA | SOUTHERN vs. Proficient Auto Logistics, | SOUTHERN vs. Consol Energy | SOUTHERN vs. Apogee Enterprises |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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