Correlation Between Olympic Steel and MYT Netherlands

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Can any of the company-specific risk be diversified away by investing in both Olympic Steel and MYT Netherlands 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 MYT Netherlands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and MYT Netherlands Parent, you can compare the effects of market volatilities on Olympic Steel and MYT Netherlands 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 MYT Netherlands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and MYT Netherlands.

Diversification Opportunities for Olympic Steel and MYT Netherlands

OlympicMYTDiversified AwayOlympicMYTDiversified Away100%
-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Olympic and MYT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent 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 MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of Olympic Steel i.e., Olympic Steel and MYT Netherlands go up and down completely randomly.

Pair Corralation between Olympic Steel and MYT Netherlands

Given the investment horizon of 90 days Olympic Steel is expected to under-perform the MYT Netherlands. But the stock apears to be less risky and, when comparing its historical volatility, Olympic Steel is 2.23 times less risky than MYT Netherlands. The stock trades about -0.09 of its potential returns per unit of risk. The MYT Netherlands Parent is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  344.00  in MYT Netherlands Parent on November 21, 2024 and sell it today you would earn a total of  766.00  from holding MYT Netherlands Parent or generate 222.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Olympic Steel  vs.  MYT Netherlands Parent

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -2002040
JavaScript chart by amCharts 3.21.15ZEUS MYTE
       Timeline  
Olympic Steel 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Olympic Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3032343638404244
MYT Netherlands Parent 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6789101112

Olympic Steel and MYT Netherlands Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.96-2.96-1.97-0.980.00.91.82.713.624.54 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15ZEUS MYTE
       Returns  

Pair Trading with Olympic Steel and MYT Netherlands

The main advantage of trading using opposite Olympic Steel and MYT Netherlands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, MYT Netherlands 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 MYT Netherlands will offset losses from the drop in MYT Netherlands' long position.
The idea behind Olympic Steel and MYT Netherlands Parent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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