Correlation Between Jeld Wen and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Jeld Wen 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 Jeld Wen and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Olympic Steel, you can compare the effects of market volatilities on Jeld Wen 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 Jeld Wen with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Olympic Steel.
Diversification Opportunities for Jeld Wen and Olympic Steel
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeld and Olympic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Jeld Wen 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 Jeld Wen Holding 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 Jeld Wen i.e., Jeld Wen and Olympic Steel go up and down completely randomly.
Pair Corralation between Jeld Wen and Olympic Steel
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Olympic Steel. In addition to that, Jeld Wen is 2.06 times more volatile than Olympic Steel. It trades about -0.12 of its total potential returns per unit of risk. Olympic Steel is currently generating about 0.23 per unit of volatility. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Olympic Steel
Performance |
| Timeline |
| Jeld Wen Holding |
| Olympic Steel |
Jeld Wen and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Olympic Steel
The main advantage of trading using opposite Jeld Wen and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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.| Jeld Wen vs. Trex Company | Jeld Wen vs. Armstrong World Industries | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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