Correlation Between Captivision Warrant and LB Foster

Can any of the company-specific risk be diversified away by investing in both Captivision Warrant 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 Captivision Warrant and LB Foster into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Captivision Warrant and LB Foster, you can compare the effects of market volatilities on Captivision Warrant 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 Captivision Warrant with a short position of LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Captivision Warrant and LB Foster.

Diversification Opportunities for Captivision Warrant and LB Foster

0.23

Correlation Coefficient

Captivision Warrant  LB Foster

Modest diversification

The 3 months correlation between Captivision and FSTR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Captivision Warrant and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Captivision Warrant 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 Captivision Warrant 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 Captivision Warrant i.e., Captivision Warrant and LB Foster go up and down completely randomly.

Pair Corralation between Captivision Warrant and LB Foster

Assuming the 90 days horizon Captivision Warrant is expected to generate 8.84 times more return on investment than LB Foster. However, Captivision Warrant is 8.84 times more volatile than LB Foster. It trades about 0.09 of its potential returns per unit of risk. LB Foster is currently generating about 0.05 per unit of risk. If you would invest  10.00  in Captivision Warrant on December 30, 2024 and sell it today you would lose (8.10) from holding Captivision Warrant or give up 81.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.97%
Values	Daily Returns

Captivision Warrant  vs.  LB Foster

Captivision Warrant

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Captivision Warrant are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Captivision Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

LB Foster

Risk-Adjusted Performance

Very Weak

Over the last 90 days LB Foster has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Captivision Warrant and LB Foster

The main advantage of trading using opposite Captivision Warrant and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Captivision Warrant 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.

The idea behind Captivision Warrant and LB Foster pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.