Correlation Between I 80 and Olympic Steel

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Can any of the company-specific risk be diversified away by investing in both I 80 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 I 80 and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I 80 Gold Corp and Olympic Steel, you can compare the effects of market volatilities on I 80 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 I 80 with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and Olympic Steel.

Diversification Opportunities for I 80 and Olympic Steel

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between IAUX and Olympic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and I 80 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 I 80 Gold Corp 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 I 80 i.e., I 80 and Olympic Steel go up and down completely randomly.

Pair Corralation between I 80 and Olympic Steel

Given the investment horizon of 90 days I 80 Gold Corp is expected to generate 2.04 times more return on investment than Olympic Steel. However, I 80 is 2.04 times more volatile than Olympic Steel. It trades about 0.05 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.16 per unit of risk. If you would invest  58.00  in I 80 Gold Corp on December 10, 2024 and sell it today you would earn a total of  5.00  from holding I 80 Gold Corp or generate 8.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

I 80 Gold Corp  vs.  Olympic Steel

 Performance 
       Timeline  
I 80 Gold 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in I 80 Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, I 80 showed solid returns over the last few months and may actually be approaching a breakup point.
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 unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

I 80 and Olympic Steel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with I 80 and Olympic Steel

The main advantage of trading using opposite I 80 and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 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.
The idea behind I 80 Gold Corp and Olympic Steel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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