Correlation Between Rostelekom PAO and LB Foster

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

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

Diversification Opportunities for Rostelekom PAO and LB Foster

0.0

Correlation Coefficient

Rostelekom PAO  LB Foster

Pay attention - limited upside

The 3 months correlation between Rostelekom and FSTR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rostelekom PAO DRC and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Rostelekom PAO 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 Rostelekom PAO DRC 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 Rostelekom PAO i.e., Rostelekom PAO and LB Foster go up and down completely randomly.

Pair Corralation between Rostelekom PAO and LB Foster

If you would invest (100.00) in Rostelekom PAO DRC on January 31, 2024 and sell it today you would earn a total of  100.00  from holding Rostelekom PAO DRC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rostelekom PAO DRC  vs.  LB Foster

Rostelekom PAO DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rostelekom PAO DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Rostelekom PAO is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

LB Foster

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LB Foster are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, LB Foster may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Rostelekom PAO and LB Foster

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

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.