Correlation Between Aldel Financial and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Olympic Steel 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 Aldel Financial and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldel Financial II and Olympic Steel, you can compare the effects of market volatilities on Aldel Financial and Olympic Steel 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 Aldel Financial with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Olympic Steel.
Diversification Opportunities for Aldel Financial and Olympic Steel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aldel and Olympic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Aldel Financial 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 Aldel Financial II are associated (or correlated) with Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of Aldel Financial i.e., Aldel Financial and Olympic Steel go up and down completely randomly.
Pair Corralation between Aldel Financial and Olympic Steel
Assuming the 90 days horizon Aldel Financial is expected to generate 7505.0 times less return on investment than Olympic Steel. But when comparing it to its historical volatility, Aldel Financial II is 34.12 times less risky than Olympic Steel. It trades about 0.0 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,638 in Olympic Steel on August 31, 2024 and sell it today you would earn a total of 593.00 from holding Olympic Steel or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Olympic Steel
Performance |
| Timeline |
| Aldel Financial II |
| Olympic Steel |
Aldel Financial and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Olympic Steel
The main advantage of trading using opposite Aldel Financial and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel's long position.| Aldel Financial vs. RBC Bearings Incorporated | Aldel Financial vs. CECO Environmental Corp | Aldel Financial vs. EMCOR Group | Aldel Financial vs. Simpson Manufacturing |
| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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