Correlation Between Emeren and LB Foster
Can any of the company-specific risk be diversified away by investing in both Emeren 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 Emeren and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emeren Group and LB Foster, you can compare the effects of market volatilities on Emeren 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 Emeren with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emeren and LB Foster.
Diversification Opportunities for Emeren and LB Foster
Pay attention - limited upside
The 3 months correlation between Emeren and FSTR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Emeren Group and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Emeren 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 Emeren Group 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 Emeren i.e., Emeren and LB Foster go up and down completely randomly.
Pair Corralation between Emeren and LB Foster
Considering the 90-day investment horizon Emeren Group is expected to under-perform the LB Foster. In addition to that, Emeren is 1.5 times more volatile than LB Foster. It trades about -0.14 of its total potential returns per unit of risk. LB Foster is currently generating about 0.31 per unit of volatility. If you would invest 2,416 in LB Foster on September 12, 2024 and sell it today you would earn a total of 491.00 from holding LB Foster or generate 20.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emeren Group vs. LB Foster
Performance |
| Timeline |
| Emeren Group |
| LB Foster |
Emeren and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emeren and LB Foster
The main advantage of trading using opposite Emeren and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeren 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.| Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. SolarEdge Technologies | Emeren vs. Sunnova Energy International |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |