Correlation Between RadNet and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both RadNet 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 RadNet and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and Olympic Steel, you can compare the effects of market volatilities on RadNet 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 RadNet with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Olympic Steel.
Diversification Opportunities for RadNet and Olympic Steel
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RadNet and Olympic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and RadNet 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 RadNet Inc 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 RadNet i.e., RadNet and Olympic Steel go up and down completely randomly.
Pair Corralation between RadNet and Olympic Steel
Given the investment horizon of 90 days RadNet Inc is expected to generate 1.06 times more return on investment than Olympic Steel. However, RadNet is 1.06 times more volatile than Olympic Steel. It trades about 0.12 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.04 per unit of risk. If you would invest 5,200 in RadNet Inc on September 3, 2024 and sell it today you would earn a total of 2,976 from holding RadNet Inc or generate 57.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. Olympic Steel
Performance |
| Timeline |
| RadNet Inc |
| Olympic Steel |
RadNet and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Olympic Steel
The main advantage of trading using opposite RadNet and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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