Correlation Between LB Foster and ZenaTech
Can any of the company-specific risk be diversified away by investing in both LB Foster and ZenaTech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LB Foster and ZenaTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and ZenaTech, you can compare the effects of market volatilities on LB Foster and ZenaTech 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 ZenaTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and ZenaTech.
Diversification Opportunities for LB Foster and ZenaTech
Poor diversification
The 3 months correlation between FSTR and ZenaTech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech 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 ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of LB Foster i.e., LB Foster and ZenaTech go up and down completely randomly.
Pair Corralation between LB Foster and ZenaTech
Given the investment horizon of 90 days LB Foster is expected to generate 0.31 times more return on investment than ZenaTech. However, LB Foster is 3.2 times less risky than ZenaTech. It trades about 0.17 of its potential returns per unit of risk. ZenaTech is currently generating about -0.1 per unit of risk. If you would invest 2,620 in LB Foster on November 9, 2024 and sell it today you would earn a total of 215.00 from holding LB Foster or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Foster vs. ZenaTech
Performance |
| Timeline |
| LB Foster |
| ZenaTech |
LB Foster and ZenaTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Foster and ZenaTech
The main advantage of trading using opposite LB Foster and ZenaTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, ZenaTech 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 ZenaTech will offset losses from the drop in ZenaTech's long position.| LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
| ZenaTech vs. Marine Products | ZenaTech vs. Paysafe | ZenaTech vs. Uber Technologies | ZenaTech vs. Senmiao Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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