Correlation Between Wheaton Precious and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Olympic Steel, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Olympic Steel.
Diversification Opportunities for Wheaton Precious and Olympic Steel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wheaton and Olympic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Olympic Steel go up and down completely randomly.
Pair Corralation between Wheaton Precious and Olympic Steel
Considering the 90-day investment horizon Wheaton Precious Metals is expected to under-perform the Olympic Steel. But the stock apears to be less risky and, when comparing its historical volatility, Wheaton Precious Metals is 1.47 times less risky than Olympic Steel. The stock trades about -0.07 of its potential returns per unit of risk. The Olympic Steel is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,457 in Olympic Steel on September 2, 2024 and sell it today you would earn a total of 771.00 from holding Olympic Steel or generate 22.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Olympic Steel
Performance |
| Timeline |
| Wheaton Precious Metals |
| Olympic Steel |
Wheaton Precious and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Olympic Steel
The main advantage of trading using opposite Wheaton Precious and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Fortitude Gold Corp | Wheaton Precious vs. New Gold | Wheaton Precious vs. Galiano Gold | Wheaton Precious vs. GoldMining |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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