Correlation Between Olympic Steel and Graf Global
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Graf Global 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 Graf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Graf Global Corp, you can compare the effects of market volatilities on Olympic Steel and Graf Global 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 Graf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Graf Global.
Diversification Opportunities for Olympic Steel and Graf Global
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Olympic and Graf is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Graf Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graf Global 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 Graf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graf Global Corp has no effect on the direction of Olympic Steel i.e., Olympic Steel and Graf Global go up and down completely randomly.
Pair Corralation between Olympic Steel and Graf Global
Given the investment horizon of 90 days Olympic Steel is expected to generate 40.41 times more return on investment than Graf Global. However, Olympic Steel is 40.41 times more volatile than Graf Global Corp. It trades about 0.23 of its potential returns per unit of risk. Graf Global Corp is currently generating about 0.05 per unit of risk. If you would invest 3,588 in Olympic Steel on September 1, 2024 and sell it today you would earn a total of 640.00 from holding Olympic Steel or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Graf Global Corp
Performance |
| Timeline |
| Olympic Steel |
| Graf Global Corp |
Olympic Steel and Graf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Graf Global
The main advantage of trading using opposite Olympic Steel and Graf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Graf Global 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 Graf Global will offset losses from the drop in Graf Global's long position.| Olympic Steel vs. Fortitude Gold Corp | Olympic Steel vs. New Gold | Olympic Steel vs. Galiano Gold | Olympic Steel vs. GoldMining |
| Graf Global vs. Adient PLC | Graf Global vs. Constellation Brands Class | Graf Global vs. Magna International | Graf Global vs. Gentex |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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