Correlation Between Univest Pennsylvania and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania 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 Univest Pennsylvania and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Olympic Steel, you can compare the effects of market volatilities on Univest Pennsylvania 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 Univest Pennsylvania with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Olympic Steel.
Diversification Opportunities for Univest Pennsylvania and Olympic Steel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Univest and Olympic is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania i.e., Univest Pennsylvania and Olympic Steel go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Olympic Steel
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 0.82 times more return on investment than Olympic Steel. However, Univest Pennsylvania is 1.22 times less risky than Olympic Steel. It trades about 0.1 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.03 per unit of risk. If you would invest 1,954 in Univest Pennsylvania on September 4, 2024 and sell it today you would earn a total of 1,203 from holding Univest Pennsylvania or generate 61.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Olympic Steel
Performance |
| Timeline |
| Univest Pennsylvania |
| Olympic Steel |
Univest Pennsylvania and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Olympic Steel
The main advantage of trading using opposite Univest Pennsylvania and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania 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.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| Olympic Steel vs. Constellium Nv | Olympic Steel vs. Century Aluminum | Olympic Steel vs. China Hongqiao Group | Olympic Steel vs. Kaiser Aluminum |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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