Correlation Between Klckner Co and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Klckner Co 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 Klckner Co and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Olympic Steel, you can compare the effects of market volatilities on Klckner Co 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 Klckner Co with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Olympic Steel.
Diversification Opportunities for Klckner Co and Olympic Steel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Klckner and Olympic is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Klckner Co 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 Klckner Co SE 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 Klckner Co i.e., Klckner Co and Olympic Steel go up and down completely randomly.
Pair Corralation between Klckner Co and Olympic Steel
Assuming the 90 days horizon Klckner Co is expected to generate 2.98 times less return on investment than Olympic Steel. But when comparing it to its historical volatility, Klckner Co SE is 4.18 times less risky than Olympic Steel. It trades about 0.22 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,807 in Olympic Steel on August 27, 2024 and sell it today you would earn a total of 434.00 from holding Olympic Steel or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klckner Co SE vs. Olympic Steel
Performance |
| Timeline |
| Klckner Co SE |
| Olympic Steel |
Klckner Co and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Olympic Steel
The main advantage of trading using opposite Klckner Co and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co 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.| Klckner Co vs. Olympic Steel | Klckner Co vs. Mesabi Trust | Klckner Co vs. Universal Stainless Alloy | Klckner Co 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |