Correlation Between East Resources and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both East Resources 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 East Resources and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Resources Acquisition and Olympic Steel, you can compare the effects of market volatilities on East Resources 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 East Resources with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Resources and Olympic Steel.
Diversification Opportunities for East Resources and Olympic Steel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between East and Olympic is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding East Resources Acquisition and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and East Resources 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 East Resources Acquisition 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 East Resources i.e., East Resources and Olympic Steel go up and down completely randomly.
Pair Corralation between East Resources and Olympic Steel
If you would invest 3,512 in Olympic Steel on September 3, 2024 and sell it today you would earn a total of 771.00 from holding Olympic Steel or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
East Resources Acquisition vs. Olympic Steel
Performance |
| Timeline |
| East Resources Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Olympic Steel |
East Resources and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Resources and Olympic Steel
The main advantage of trading using opposite East Resources and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Resources 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.| East Resources vs. Cheniere Energy Partners | East Resources vs. Vistra Energy Corp | East Resources vs. Atmos Energy | East Resources vs. CenterPoint Energy |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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