Correlation Between US Global and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Olympic Steel, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Olympic Steel.
Diversification Opportunities for US Global and Olympic Steel
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between GROW and Olympic is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and US Global 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 US Global Investors 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 US Global i.e., US Global and Olympic Steel go up and down completely randomly.
Pair Corralation between US Global and Olympic Steel
Given the investment horizon of 90 days US Global is expected to generate 70.69 times less return on investment than Olympic Steel. But when comparing it to its historical volatility, US Global Investors is 2.34 times less risky than Olympic Steel. It trades about 0.01 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,588 in Olympic Steel on September 1, 2024 and sell it today you would earn a total of 640.00 from holding Olympic Steel or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Olympic Steel
Performance |
| Timeline |
| US Global Investors |
| Olympic Steel |
US Global and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Olympic Steel
The main advantage of trading using opposite US Global and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Visa Class A | US Global vs. Diamond Hill Investment | US Global vs. Distoken Acquisition | US Global vs. Associated Capital Group |
| Olympic Steel vs. Fortitude Gold Corp | Olympic Steel vs. New Gold | Olympic Steel vs. Galiano Gold | Olympic Steel vs. GoldMining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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