Correlation Between Olympic Steel and APACHE

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and APACHE 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 APACHE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and APACHE P 425, you can compare the effects of market volatilities on Olympic Steel and APACHE 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 APACHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and APACHE.

Diversification Opportunities for Olympic Steel and APACHE

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Olympic and APACHE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and APACHE P 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APACHE P 425 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 APACHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APACHE P 425 has no effect on the direction of Olympic Steel i.e., Olympic Steel and APACHE go up and down completely randomly.

Pair Corralation between Olympic Steel and APACHE

Given the investment horizon of 90 days Olympic Steel is expected to under-perform the APACHE. In addition to that, Olympic Steel is 1.04 times more volatile than APACHE P 425. It trades about -0.01 of its total potential returns per unit of risk. APACHE P 425 is currently generating about 0.03 per unit of volatility. If you would invest  6,415  in APACHE P 425 on September 1, 2024 and sell it today you would earn a total of  525.00  from holding APACHE P 425 or generate 8.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy76.58%
ValuesDaily Returns

Olympic Steel  vs.  APACHE P 425

 Performance 
       Timeline  
Olympic Steel 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Olympic Steel are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Olympic Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.
APACHE P 425 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days APACHE P 425 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APACHE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Olympic Steel and APACHE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Olympic Steel and APACHE

The main advantage of trading using opposite Olympic Steel and APACHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, APACHE 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 APACHE will offset losses from the drop in APACHE's long position.
Olympic Steel vs. Fortitude Gold Corp
Olympic Steel vs. New Gold
Olympic Steel vs. Galiano Gold
Olympic Steel vs. GoldMining
The idea behind Olympic Steel and APACHE P 425 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.
APACHE vs. Franklin Credit Management
APACHE vs. Stepstone Group
APACHE vs. SNDL Inc
APACHE vs. Brandywine Realty Trust
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Transaction History
View history of all your transactions and understand their impact on performance
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY