Correlation Between LB Foster and MQGAU

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

By analyzing existing cross correlation between LB Foster and MQGAU 5491 09 NOV 33, you can compare the effects of market volatilities on LB Foster and MQGAU 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 MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Foster and MQGAU.

Diversification Opportunities for LB Foster and MQGAU

-0.02

Correlation Coefficient

LB Foster  MQGAU

Good diversification

The 3 months correlation between FSTR and MQGAU is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and MQGAU 5491 09 NOV 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 5491 09 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 MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 5491 09 has no effect on the direction of LB Foster i.e., LB Foster and MQGAU go up and down completely randomly.

Pair Corralation between LB Foster and MQGAU

Given the investment horizon of 90 days LB Foster is expected to under-perform the MQGAU. In addition to that, LB Foster is 2.81 times more volatile than MQGAU 5491 09 NOV 33. It trades about -0.13 of its total potential returns per unit of risk. MQGAU 5491 09 NOV 33 is currently generating about -0.01 per unit of volatility. If you would invest  9,962  in MQGAU 5491 09 NOV 33 on December 22, 2024 and sell it today you would lose (33.00) from holding MQGAU 5491 09 NOV 33 or give up 0.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.67%
Values	Daily Returns

LB Foster  vs.  MQGAU 5491 09 NOV 33

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.

MQGAU 5491 09

Risk-Adjusted Performance

Solid

Over the last 90 days MQGAU 5491 09 NOV 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MQGAU is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LB Foster and MQGAU

The main advantage of trading using opposite LB Foster and MQGAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Foster position performs unexpectedly, MQGAU 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 MQGAU will offset losses from the drop in MQGAU's long position.

The idea behind LB Foster and MQGAU 5491 09 NOV 33 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.