Correlation Between Olympic Steel and UNIPHAR PLC
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and UNIPHAR PLC 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 Olympic Steel and UNIPHAR PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and UNIPHAR PLC EO, you can compare the effects of market volatilities on Olympic Steel and UNIPHAR PLC 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 Olympic Steel with a short position of UNIPHAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and UNIPHAR PLC.
Diversification Opportunities for Olympic Steel and UNIPHAR PLC
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Olympic and UNIPHAR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and UNIPHAR PLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIPHAR PLC EO and Olympic Steel 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 Olympic Steel are associated (or correlated) with UNIPHAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIPHAR PLC EO has no effect on the direction of Olympic Steel i.e., Olympic Steel and UNIPHAR PLC go up and down completely randomly.
Pair Corralation between Olympic Steel and UNIPHAR PLC
Assuming the 90 days trading horizon Olympic Steel is expected to generate 0.93 times more return on investment than UNIPHAR PLC. However, Olympic Steel is 1.07 times less risky than UNIPHAR PLC. It trades about -0.01 of its potential returns per unit of risk. UNIPHAR PLC EO is currently generating about -0.03 per unit of risk. If you would invest 4,254 in Olympic Steel on October 25, 2024 and sell it today you would lose (1,014) from holding Olympic Steel or give up 23.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. UNIPHAR PLC EO
Performance |
| Timeline |
| Olympic Steel |
| UNIPHAR PLC EO |
Olympic Steel and UNIPHAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and UNIPHAR PLC
The main advantage of trading using opposite Olympic Steel and UNIPHAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, UNIPHAR PLC 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 UNIPHAR PLC will offset losses from the drop in UNIPHAR PLC's long position.| Olympic Steel vs. FANDIFI TECHNOLOGY P | Olympic Steel vs. Kingdee International Software | Olympic Steel vs. TreeHouse Foods | Olympic Steel vs. Performance Food Group |
| UNIPHAR PLC vs. SQUIRREL MEDIA SA | UNIPHAR PLC vs. International Consolidated Airlines | UNIPHAR PLC vs. Live Nation Entertainment | UNIPHAR PLC vs. CNVISION MEDIA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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