Correlation Between Olympic Steel and Aeye
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Aeye 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 Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Aeye Inc, you can compare the effects of market volatilities on Olympic Steel and Aeye 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 Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Aeye.
Diversification Opportunities for Olympic Steel and Aeye
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Olympic and Aeye is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc 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 Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Olympic Steel i.e., Olympic Steel and Aeye go up and down completely randomly.
Pair Corralation between Olympic Steel and Aeye
Given the investment horizon of 90 days Olympic Steel is expected to generate 0.27 times more return on investment than Aeye. However, Olympic Steel is 3.65 times less risky than Aeye. It trades about 0.03 of its potential returns per unit of risk. Aeye Inc is currently generating about -0.02 per unit of risk. If you would invest 3,300 in Olympic Steel on August 31, 2024 and sell it today you would earn a total of 928.00 from holding Olympic Steel or generate 28.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Aeye Inc
Performance |
| Timeline |
| Olympic Steel |
| Aeye Inc |
Olympic Steel and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Aeye
The main advantage of trading using opposite Olympic Steel and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye'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 |
| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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