Correlation Between Olympic Steel and J Long
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and J Long 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 J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and J Long Group Limited, you can compare the effects of market volatilities on Olympic Steel and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and J Long.
Diversification Opportunities for Olympic Steel and J Long
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Olympic and J Long is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Olympic Steel i.e., Olympic Steel and J Long go up and down completely randomly.
Pair Corralation between Olympic Steel and J Long
Given the investment horizon of 90 days Olympic Steel is expected to generate 0.39 times more return on investment than J Long. However, Olympic Steel is 2.59 times less risky than J Long. It trades about 0.23 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.25 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. J Long Group Limited
Performance |
| Timeline |
| Olympic Steel |
| J Long Group |
Olympic Steel and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and J Long
The main advantage of trading using opposite Olympic Steel and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.| Olympic Steel vs. Fortitude Gold Corp | Olympic Steel vs. New Gold | Olympic Steel vs. Galiano Gold | Olympic Steel vs. GoldMining |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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