Correlation Between Olympic Steel and Elutia
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Elutia 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 Elutia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Elutia Inc, you can compare the effects of market volatilities on Olympic Steel and Elutia 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 Elutia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Elutia.
Diversification Opportunities for Olympic Steel and Elutia
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Olympic and Elutia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc 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 Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Olympic Steel i.e., Olympic Steel and Elutia go up and down completely randomly.
Pair Corralation between Olympic Steel and Elutia
Given the investment horizon of 90 days Olympic Steel is expected to generate 6.22 times less return on investment than Elutia. But when comparing it to its historical volatility, Olympic Steel is 2.39 times less risky than Elutia. It trades about 0.02 of its potential returns per unit of risk. Elutia Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Elutia Inc on September 24, 2024 and sell it today you would earn a total of 81.00 from holding Elutia Inc or generate 20.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Elutia Inc
Performance |
| Timeline |
| Olympic Steel |
| Elutia Inc |
Olympic Steel and Elutia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Elutia
The main advantage of trading using opposite Olympic Steel and Elutia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Elutia 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 Elutia will offset losses from the drop in Elutia's long position.| Olympic Steel vs. Wheaton Precious Metals | Olympic Steel vs. Royal Gold | Olympic Steel vs. Gold Fields Ltd | Olympic Steel vs. SSR Mining |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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