Correlation Between Allegheny Technologies and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies 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 Allegheny Technologies and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and Olympic Steel, you can compare the effects of market volatilities on Allegheny Technologies 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 Allegheny Technologies with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Olympic Steel.
Diversification Opportunities for Allegheny Technologies and Olympic Steel
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allegheny and Olympic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Allegheny Technologies 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 Allegheny Technologies Incorporated 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 Allegheny Technologies i.e., Allegheny Technologies and Olympic Steel go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Olympic Steel
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.86 times more return on investment than Olympic Steel. However, Allegheny Technologies Incorporated is 1.16 times less risky than Olympic Steel. It trades about 0.07 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.03 per unit of risk. If you would invest 2,952 in Allegheny Technologies Incorporated on August 30, 2024 and sell it today you would earn a total of 3,060 from holding Allegheny Technologies Incorporated or generate 103.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Olympic Steel
Performance |
| Timeline |
| Allegheny Technologies |
| Olympic Steel |
Allegheny Technologies and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Olympic Steel
The main advantage of trading using opposite Allegheny Technologies and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies 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.| Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. Ryerson Holding Corp | Allegheny Technologies vs. Mueller Industries | Allegheny Technologies vs. ESAB Corp |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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