Correlation Between Golden Star and LB Foster
Can any of the company-specific risk be diversified away by investing in both Golden Star and LB Foster 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 Golden Star and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Acquisition and LB Foster, you can compare the effects of market volatilities on Golden Star and LB Foster 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 Golden Star with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and LB Foster.
Diversification Opportunities for Golden Star and LB Foster
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and FSTR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Golden Star 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 Golden Star Acquisition are associated (or correlated) with LB Foster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Foster has no effect on the direction of Golden Star i.e., Golden Star and LB Foster go up and down completely randomly.
Pair Corralation between Golden Star and LB Foster
Assuming the 90 days horizon Golden Star Acquisition is expected to generate 1.44 times more return on investment than LB Foster. However, Golden Star is 1.44 times more volatile than LB Foster. It trades about 0.19 of its potential returns per unit of risk. LB Foster is currently generating about 0.14 per unit of risk. If you would invest 1,149 in Golden Star Acquisition on October 22, 2024 and sell it today you would earn a total of 135.00 from holding Golden Star Acquisition or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Star Acquisition vs. LB Foster
Performance |
| Timeline |
| Golden Star Acquisition |
| LB Foster |
Golden Star and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and LB Foster
The main advantage of trading using opposite Golden Star and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, LB Foster 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 LB Foster will offset losses from the drop in LB Foster's long position.| Golden Star vs. LB Foster | Golden Star vs. CVR Partners LP | Golden Star vs. Simon Property Group | Golden Star vs. Air Products and |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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