Correlation Between LB Foster and JBS NV

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

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

Diversification Opportunities for LB Foster and JBS NV

-0.72

Correlation Coefficient

LB Foster  JBS NV

Pay attention - limited upside

The 3 months correlation between FSTR and JBS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding LB Foster and JBS NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS NV 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 JBS NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS NV has no effect on the direction of LB Foster i.e., LB Foster and JBS NV go up and down completely randomly.

Pair Corralation between LB Foster and JBS NV

Given the investment horizon of 90 days LB Foster is expected to generate 0.97 times more return on investment than JBS NV. However, LB Foster is 1.03 times less risky than JBS NV. It trades about 0.15 of its potential returns per unit of risk. JBS NV is currently generating about 0.07 per unit of risk. If you would invest  1,895  in LB Foster on May 21, 2025 and sell it today you would earn a total of  414.00  from holding LB Foster or generate 21.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.81%
Values	Daily Returns

LB Foster  vs.  JBS NV

LB Foster

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in LB Foster are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, LB Foster reported solid returns over the last few months and may actually be approaching a breakup point.

JBS NV

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in JBS NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental drivers, JBS NV may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with LB Foster and JBS NV

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

The idea behind LB Foster and JBS NV 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.