Correlation Between Olympic Steel and NISOURCE
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By analyzing existing cross correlation between Olympic Steel and NISOURCE FIN P, you can compare the effects of market volatilities on Olympic Steel and NISOURCE 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 NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and NISOURCE.
Diversification Opportunities for Olympic Steel and NISOURCE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Olympic and NISOURCE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Olympic Steel i.e., Olympic Steel and NISOURCE go up and down completely randomly.
Pair Corralation between Olympic Steel and NISOURCE
Given the investment horizon of 90 days Olympic Steel is expected to generate 132.33 times less return on investment than NISOURCE. But when comparing it to its historical volatility, Olympic Steel is 42.31 times less risky than NISOURCE. It trades about 0.03 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,331 in NISOURCE FIN P on September 3, 2024 and sell it today you would lose (273.00) from holding NISOURCE FIN P or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.02% |
| Values | Daily Returns |
Olympic Steel vs. NISOURCE FIN P
Performance |
| Timeline |
| Olympic Steel |
| NISOURCE FIN P |
Olympic Steel and NISOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and NISOURCE
The main advantage of trading using opposite Olympic Steel and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, NISOURCE 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 NISOURCE will offset losses from the drop in NISOURCE'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 |
| NISOURCE vs. Yum Brands | NISOURCE vs. The Hanover Insurance | NISOURCE vs. Citizens | NISOURCE vs. Trupanion |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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