Correlation Between Olympic Steel and Graphjet Technology
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Graphjet Technology 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 Graphjet Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Graphjet Technology, you can compare the effects of market volatilities on Olympic Steel and Graphjet Technology 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 Graphjet Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Graphjet Technology.
Diversification Opportunities for Olympic Steel and Graphjet Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Olympic and Graphjet is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Graphjet Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphjet Technology 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 Graphjet Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphjet Technology has no effect on the direction of Olympic Steel i.e., Olympic Steel and Graphjet Technology go up and down completely randomly.
Pair Corralation between Olympic Steel and Graphjet Technology
Given the investment horizon of 90 days Olympic Steel is expected to generate 0.27 times more return on investment than Graphjet Technology. However, Olympic Steel is 3.69 times less risky than Graphjet Technology. It trades about -0.01 of its potential returns per unit of risk. Graphjet Technology is currently generating about -0.03 per unit of risk. If you would invest 4,960 in Olympic Steel on September 12, 2024 and sell it today you would lose (760.00) from holding Olympic Steel or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.99% |
| Values | Daily Returns |
Olympic Steel vs. Graphjet Technology
Performance |
| Timeline |
| Olympic Steel |
| Graphjet Technology |
Olympic Steel and Graphjet Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Graphjet Technology
The main advantage of trading using opposite Olympic Steel and Graphjet Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Graphjet Technology 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 Graphjet Technology will offset losses from the drop in Graphjet Technology's long position.| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings |
| Graphjet Technology vs. Uranium Energy Corp | Graphjet Technology vs. Ironveld Plc | Graphjet Technology vs. Olympic Steel | Graphjet Technology vs. Boston Beer |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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