Correlation Between Acerinox and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Acerinox 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 Acerinox and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox SA ADR and Olympic Steel, you can compare the effects of market volatilities on Acerinox 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 Acerinox with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Olympic Steel.
Diversification Opportunities for Acerinox and Olympic Steel
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acerinox and Olympic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox SA ADR and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Acerinox 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 Acerinox SA ADR 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 Acerinox i.e., Acerinox and Olympic Steel go up and down completely randomly.
Pair Corralation between Acerinox and Olympic Steel
Assuming the 90 days horizon Acerinox SA ADR is expected to generate 0.79 times more return on investment than Olympic Steel. However, Acerinox SA ADR is 1.27 times less risky than Olympic Steel. It trades about -0.04 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.06 per unit of risk. If you would invest 499.00 in Acerinox SA ADR on October 20, 2024 and sell it today you would lose (7.00) from holding Acerinox SA ADR or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Acerinox SA ADR vs. Olympic Steel
Performance |
| Timeline |
| Acerinox SA ADR |
| Olympic Steel |
Acerinox and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Olympic Steel
The main advantage of trading using opposite Acerinox and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox 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.| Acerinox vs. ArcelorMittal SA | Acerinox vs. Algoma Steel Group | Acerinox vs. Synalloy | Acerinox vs. Algoma Steel Group |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |