Correlation Between ANGANG STEEL and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Olympic Steel, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Olympic Steel.
Diversification Opportunities for ANGANG STEEL and Olympic Steel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGANG and Olympic is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and Olympic Steel go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Olympic Steel
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.61 times more return on investment than Olympic Steel. However, ANGANG STEEL is 1.61 times more volatile than Olympic Steel. It trades about 0.11 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.0 per unit of risk. If you would invest 12.00 in ANGANG STEEL H on November 2, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Olympic Steel
Performance |
| Timeline |
| ANGANG STEEL H |
| Olympic Steel |
ANGANG STEEL and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Olympic Steel
The main advantage of trading using opposite ANGANG STEEL and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. THORNEY TECHS LTD | ANGANG STEEL vs. Tradegate AG Wertpapierhandelsbank | ANGANG STEEL vs. GLG LIFE TECH | ANGANG STEEL vs. VELA TECHNOLPLC LS 0001 |
| Olympic Steel vs. Brockhaus Capital Management | Olympic Steel vs. Jupiter Fund Management | Olympic Steel vs. ANTA SPORTS PRODUCT | Olympic Steel vs. Gaming and Leisure |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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