Correlation Between Electrovaya Common and LB Foster

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

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

Diversification Opportunities for Electrovaya Common and LB Foster

0.7

Correlation Coefficient

Electrovaya Common  LB Foster

Poor diversification

The 3 months correlation between Electrovaya and FSTR is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and LB Foster go up and down completely randomly.

Pair Corralation between Electrovaya Common and LB Foster

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 2.55 times more return on investment than LB Foster. However, Electrovaya Common is 2.55 times more volatile than LB Foster. It trades about 0.37 of its potential returns per unit of risk. LB Foster is currently generating about -0.1 per unit of risk. If you would invest  318.00  in Electrovaya Common Shares on May 5, 2025 and sell it today you would earn a total of  168.00  from holding Electrovaya Common Shares or generate 52.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Electrovaya Common Shares  vs.  LB Foster

Electrovaya Common Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

LB Foster

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LB Foster are ranked lower than 5 (%) 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 September 2025.

Pair Trading with Electrovaya Common and LB Foster

The main advantage of trading using opposite Electrovaya Common and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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 Electrovaya Common Shares 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.