Correlation Between LB Foster and CARDINAL
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By analyzing existing cross correlation between LB Foster and CARDINAL HEALTH INC, you can compare the effects of market volatilities on LB Foster and CARDINAL 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 CARDINAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and CARDINAL.
Diversification Opportunities for LB Foster and CARDINAL
Significant diversification
The 3 months correlation between FSTR and CARDINAL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and CARDINAL HEALTH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH INC 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 CARDINAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH INC has no effect on the direction of LB Foster i.e., LB Foster and CARDINAL go up and down completely randomly.
Pair Corralation between LB Foster and CARDINAL
Given the investment horizon of 90 days LB Foster is expected to under-perform the CARDINAL. In addition to that, LB Foster is 2.01 times more volatile than CARDINAL HEALTH INC. It trades about -0.08 of its total potential returns per unit of risk. CARDINAL HEALTH INC is currently generating about -0.06 per unit of volatility. If you would invest 8,490 in CARDINAL HEALTH INC on December 5, 2024 and sell it today you would lose (241.00) from holding CARDINAL HEALTH INC or give up 2.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 64.41% |
Values | Daily Returns |
LB Foster vs. CARDINAL HEALTH INC
Performance |
Timeline |
LB Foster |
CARDINAL HEALTH INC |
LB Foster and CARDINAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LB Foster and CARDINAL
The main advantage of trading using opposite LB Foster and CARDINAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, CARDINAL 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 CARDINAL will offset losses from the drop in CARDINAL's long position.LB Foster vs. Trinity Industries | LB Foster vs. Freightcar America | LB Foster vs. Westinghouse Air Brake | LB Foster vs. Norfolk Southern |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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