Correlation Between VS Media and LB Foster
Can any of the company-specific risk be diversified away by investing in both VS Media 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 VS Media and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VS Media Holdings and LB Foster, you can compare the effects of market volatilities on VS Media 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 VS Media with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of VS Media and LB Foster.
Diversification Opportunities for VS Media and LB Foster
Very good diversification
The 3 months correlation between VSME and FSTR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VS Media Holdings and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and VS Media 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 VS Media 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 VS Media i.e., VS Media and LB Foster go up and down completely randomly.
Pair Corralation between VS Media and LB Foster
Given the investment horizon of 90 days VS Media Holdings is expected to under-perform the LB Foster. In addition to that, VS Media is 2.35 times more volatile than LB Foster. It trades about -0.11 of its total potential returns per unit of risk. LB Foster is currently generating about 0.17 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VS Media Holdings vs. LB Foster
Performance |
| Timeline |
| VS Media Holdings |
| LB Foster |
VS Media and LB Foster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VS Media and LB Foster
The main advantage of trading using opposite VS Media and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VS Media 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.| VS Media vs. Lithium Americas Corp | VS Media vs. Ecovyst | VS Media vs. Air Products and | VS Media vs. Ecolab Inc |
| 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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