Correlation Between Greenbrier Companies and LB Foster

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

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

Diversification Opportunities for Greenbrier Companies and LB Foster

0.56

Correlation Coefficient

Greenbrier Companies  LB Foster

Very weak diversification

The 3 months correlation between Greenbrier and FSTR is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Greenbrier Companies and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster and Greenbrier Companies 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 Greenbrier Companies 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 Greenbrier Companies i.e., Greenbrier Companies and LB Foster go up and down completely randomly.

Pair Corralation between Greenbrier Companies and LB Foster

Considering the 90-day investment horizon Greenbrier Companies is expected to generate 3.18 times less return on investment than LB Foster. In addition to that, Greenbrier Companies is 1.37 times more volatile than LB Foster. It trades about 0.02 of its total potential returns per unit of risk. LB Foster is currently generating about 0.1 per unit of volatility. If you would invest  1,966  in LB Foster on May 6, 2025 and sell it today you would earn a total of  266.00  from holding LB Foster or generate 13.53% return on investment over 90 days.

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

Greenbrier Companies  vs.  LB Foster

Greenbrier Companies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenbrier Companies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental drivers, Greenbrier Companies 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

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LB Foster are ranked lower than 7 (%) 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.

Pair Trading with Greenbrier Companies and LB Foster

The main advantage of trading using opposite Greenbrier Companies and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenbrier Companies 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 Greenbrier Companies 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.