Correlation Between LB Foster and Argentum
Can any of the company-specific risk be diversified away by investing in both LB Foster and Argentum 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 LB Foster and Argentum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Foster and Argentum 47, you can compare the effects of market volatilities on LB Foster and Argentum 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 LB Foster with a short position of Argentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and Argentum.
Diversification Opportunities for LB Foster and Argentum
Excellent diversification
The 3 months correlation between FSTR and Argentum is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and Argentum 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentum 47 and LB Foster 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 LB Foster are associated (or correlated) with Argentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentum 47 has no effect on the direction of LB Foster i.e., LB Foster and Argentum go up and down completely randomly.
Pair Corralation between LB Foster and Argentum
Given the investment horizon of 90 days LB Foster is expected to generate 0.37 times more return on investment than Argentum. However, LB Foster is 2.7 times less risky than Argentum. It trades about 0.47 of its potential returns per unit of risk. Argentum 47 is currently generating about -0.17 per unit of risk. If you would invest 1,962 in LB Foster on September 6, 2024 and sell it today you would earn a total of 963.00 from holding LB Foster or generate 49.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
LB Foster vs. Argentum 47
Performance |
Timeline |
LB Foster |
Argentum 47 |
LB Foster and Argentum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LB Foster and Argentum
The main advantage of trading using opposite LB Foster and Argentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, Argentum 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 Argentum will offset losses from the drop in Argentum's long position.LB Foster vs. Ayala | LB Foster vs. Steel Partners Holdings | LB Foster vs. Griffon | LB Foster vs. Matthews International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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