Correlation Between Mativ Holdings and LB Foster
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings 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 Mativ Holdings and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and LB Foster, you can compare the effects of market volatilities on Mativ Holdings 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 Mativ Holdings with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and LB Foster.
Diversification Opportunities for Mativ Holdings and LB Foster
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mativ and FSTR is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings i.e., Mativ Holdings and LB Foster go up and down completely randomly.
Pair Corralation between Mativ Holdings and LB Foster
Given the investment horizon of 90 days Mativ Holdings is expected to generate 12.26 times less return on investment than LB Foster. In addition to that, Mativ Holdings is 1.51 times more volatile than LB Foster. It trades about 0.0 of its total potential returns per unit of risk. LB Foster is currently generating about 0.08 per unit of volatility. If you would invest 1,374 in LB Foster on September 12, 2024 and sell it today you would earn a total of 1,488 from holding LB Foster or generate 108.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. LB Foster
Performance |
| Timeline |
| Mativ Holdings |
| LB Foster |
Mativ Holdings and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and LB Foster
The main advantage of trading using opposite Mativ Holdings and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings 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.| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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