Correlation Between AngloGold Ashanti and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti 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 AngloGold Ashanti and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AngloGold Ashanti plc and Olympic Steel, you can compare the effects of market volatilities on AngloGold Ashanti 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 AngloGold Ashanti with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Olympic Steel.
Diversification Opportunities for AngloGold Ashanti and Olympic Steel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between AngloGold and Olympic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and AngloGold Ashanti 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 AngloGold Ashanti plc 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 AngloGold Ashanti i.e., AngloGold Ashanti and Olympic Steel go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and Olympic Steel
Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 0.88 times more return on investment than Olympic Steel. However, AngloGold Ashanti plc is 1.14 times less risky than Olympic Steel. It trades about 0.05 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.09 per unit of risk. If you would invest 3,086 in AngloGold Ashanti plc on December 6, 2024 and sell it today you would earn a total of 63.00 from holding AngloGold Ashanti plc or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. Olympic Steel
Performance |
| Timeline |
| AngloGold Ashanti plc |
| Olympic Steel |
AngloGold Ashanti and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and Olympic Steel
The main advantage of trading using opposite AngloGold Ashanti and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti 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.| AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
| Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings | Olympic Steel vs. Steel Dynamics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |