Correlation Between Olympic Steel and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Jeld Wen 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 Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Jeld Wen Holding, you can compare the effects of market volatilities on Olympic Steel and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Jeld Wen.
Diversification Opportunities for Olympic Steel and Jeld Wen
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Olympic and Jeld is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Olympic Steel i.e., Olympic Steel and Jeld Wen go up and down completely randomly.
Pair Corralation between Olympic Steel and Jeld Wen
Given the investment horizon of 90 days Olympic Steel is expected to generate 0.49 times more return on investment than Jeld Wen. However, Olympic Steel is 2.06 times less risky than Jeld Wen. It trades about 0.23 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.12 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Jeld Wen Holding
Performance |
| Timeline |
| Olympic Steel |
| Jeld Wen Holding |
Olympic Steel and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Jeld Wen
The main advantage of trading using opposite Olympic Steel and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| Olympic Steel vs. Fortitude Gold Corp | Olympic Steel vs. New Gold | Olympic Steel vs. Galiano Gold | Olympic Steel vs. GoldMining |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Armstrong World Industries | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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