Correlation Between Olympic Steel and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Fidus Investment 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 Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Fidus Investment Corp, you can compare the effects of market volatilities on Olympic Steel and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Fidus Investment.
Diversification Opportunities for Olympic Steel and Fidus Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Olympic and Fidus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Olympic Steel i.e., Olympic Steel and Fidus Investment go up and down completely randomly.
Pair Corralation between Olympic Steel and Fidus Investment
Given the investment horizon of 90 days Olympic Steel is expected to generate 4.52 times more return on investment than Fidus Investment. However, Olympic Steel is 4.52 times more volatile than Fidus Investment Corp. It trades about 0.28 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.57 per unit of risk. If you would invest 3,512 in Olympic Steel on September 4, 2024 and sell it today you would earn a total of 771.00 from holding Olympic Steel or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Fidus Investment Corp
Performance |
| Timeline |
| Olympic Steel |
| Fidus Investment Corp |
Olympic Steel and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Fidus Investment
The main advantage of trading using opposite Olympic Steel and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| Olympic Steel vs. Constellium Nv | Olympic Steel vs. Century Aluminum | Olympic Steel vs. China Hongqiao Group | Olympic Steel vs. Kaiser Aluminum |
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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