Correlation Between Hurco Companies and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Hurco Companies 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 Hurco Companies and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and Olympic Steel, you can compare the effects of market volatilities on Hurco Companies 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 Hurco Companies with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Olympic Steel.
Diversification Opportunities for Hurco Companies and Olympic Steel
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hurco and Olympic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Hurco Companies 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 Hurco Companies 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 Hurco Companies i.e., Hurco Companies and Olympic Steel go up and down completely randomly.
Pair Corralation between Hurco Companies and Olympic Steel
Given the investment horizon of 90 days Hurco Companies is expected to generate 0.95 times more return on investment than Olympic Steel. However, Hurco Companies is 1.05 times less risky than Olympic Steel. It trades about 0.09 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.04 per unit of risk. If you would invest 1,800 in Hurco Companies on August 28, 2024 and sell it today you would earn a total of 519.00 from holding Hurco Companies or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. Olympic Steel
Performance |
| Timeline |
| Hurco Companies |
| Olympic Steel |
Hurco Companies and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and Olympic Steel
The main advantage of trading using opposite Hurco Companies and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies 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.| Hurco Companies vs. Aquagold International | Hurco Companies vs. Morningstar Unconstrained Allocation | Hurco Companies vs. High Yield Municipal Fund | Hurco Companies vs. Thrivent High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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