Correlation Between Mid Atlantic and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Mid Atlantic 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 Mid Atlantic and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Atlantic Home Health and Olympic Steel, you can compare the effects of market volatilities on Mid Atlantic 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 Mid Atlantic with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Atlantic and Olympic Steel.
Diversification Opportunities for Mid Atlantic and Olympic Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mid and Olympic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Mid Atlantic 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 Mid Atlantic Home Health 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 Mid Atlantic i.e., Mid Atlantic and Olympic Steel go up and down completely randomly.
Pair Corralation between Mid Atlantic and Olympic Steel
Given the investment horizon of 90 days Mid Atlantic Home Health is expected to under-perform the Olympic Steel. In addition to that, Mid Atlantic is 1.84 times more volatile than Olympic Steel. It trades about -0.06 of its total potential returns per unit of risk. Olympic Steel is currently generating about 0.03 per unit of volatility. If you would invest 3,281 in Olympic Steel on September 14, 2024 and sell it today you would earn a total of 714.00 from holding Olympic Steel or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mid Atlantic Home Health vs. Olympic Steel
Performance |
| Timeline |
| Mid Atlantic Home |
| Olympic Steel |
Mid Atlantic and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Atlantic and Olympic Steel
The main advantage of trading using opposite Mid Atlantic and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Atlantic 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.| Mid Atlantic vs. Pennant Group | Mid Atlantic vs. Encompass Health Corp | Mid Atlantic vs. Enhabit | Mid Atlantic vs. Concord Medical Services |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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