Correlation Between FUYO GENERAL and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Olympic Steel 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 FUYO GENERAL and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Olympic Steel, you can compare the effects of market volatilities on FUYO GENERAL and Olympic Steel 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 FUYO GENERAL with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Olympic Steel.
Diversification Opportunities for FUYO GENERAL and Olympic Steel
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FUYO and Olympic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and FUYO GENERAL 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 FUYO GENERAL LEASE are associated (or correlated) with Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Olympic Steel go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Olympic Steel
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.42 times more return on investment than Olympic Steel. However, FUYO GENERAL LEASE is 2.4 times less risky than Olympic Steel. It trades about 0.1 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.0 per unit of risk. If you would invest 6,350 in FUYO GENERAL LEASE on October 25, 2024 and sell it today you would earn a total of 450.00 from holding FUYO GENERAL LEASE or generate 7.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FUYO GENERAL LEASE vs. Olympic Steel
Performance |
Timeline |
FUYO GENERAL LEASE |
Olympic Steel |
FUYO GENERAL and Olympic Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FUYO GENERAL and Olympic Steel
The main advantage of trading using opposite FUYO GENERAL and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel's long position.FUYO GENERAL vs. RYU Apparel | FUYO GENERAL vs. Merit Medical Systems | FUYO GENERAL vs. G III Apparel Group | FUYO GENERAL vs. Inspire Medical Systems |
Olympic Steel vs. FANDIFI TECHNOLOGY P | Olympic Steel vs. Kingdee International Software | Olympic Steel vs. TreeHouse Foods | Olympic Steel vs. Performance Food Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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