Correlation Between USD Partners and LB Foster
Can any of the company-specific risk be diversified away by investing in both USD Partners 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 USD Partners and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USD Partners LP and LB Foster, you can compare the effects of market volatilities on USD Partners 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 USD Partners with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of USD Partners and LB Foster.
Diversification Opportunities for USD Partners and LB Foster
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USD and FSTR is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding USD Partners LP and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and USD Partners 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 USD Partners LP 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 USD Partners i.e., USD Partners and LB Foster go up and down completely randomly.
Pair Corralation between USD Partners and LB Foster
If you would invest 1,885 in LB Foster on September 1, 2024 and sell it today you would earn a total of 988.00 from holding LB Foster or generate 52.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
USD Partners LP vs. LB Foster
Performance |
| Timeline |
| USD Partners LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LB Foster |
USD Partners and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USD Partners and LB Foster
The main advantage of trading using opposite USD Partners and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USD Partners 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.| USD Partners vs. Greenbrier Companies | USD Partners vs. LB Foster | USD Partners vs. Freightcar America | USD Partners vs. Westinghouse Air Brake |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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