Correlation Between Usinas Siderurgicas and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Usinas Siderurgicas 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 Usinas Siderurgicas and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usinas Siderurgicas de and Olympic Steel, you can compare the effects of market volatilities on Usinas Siderurgicas 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 Usinas Siderurgicas with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderurgicas and Olympic Steel.
Diversification Opportunities for Usinas Siderurgicas and Olympic Steel
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Usinas and Olympic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderurgicas de and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Usinas Siderurgicas 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 Usinas Siderurgicas de 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 Usinas Siderurgicas i.e., Usinas Siderurgicas and Olympic Steel go up and down completely randomly.
Pair Corralation between Usinas Siderurgicas and Olympic Steel
Assuming the 90 days horizon Usinas Siderurgicas de is expected to under-perform the Olympic Steel. In addition to that, Usinas Siderurgicas is 1.18 times more volatile than Olympic Steel. It trades about -0.01 of its total potential returns per unit of risk. Olympic Steel is currently generating about 0.15 per unit of volatility. If you would invest 3,653 in Olympic Steel on August 24, 2024 and sell it today you would earn a total of 423.00 from holding Olympic Steel or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderurgicas de vs. Olympic Steel
Performance |
| Timeline |
| Usinas Siderurgicas |
| Olympic Steel |
Usinas Siderurgicas and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderurgicas and Olympic Steel
The main advantage of trading using opposite Usinas Siderurgicas and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderurgicas 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.| Usinas Siderurgicas vs. ArcelorMittal SA ADR | Usinas Siderurgicas vs. Gerdau SA ADR | Usinas Siderurgicas vs. POSCO Holdings | Usinas Siderurgicas vs. HUMANA INC |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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