Correlation Between PACIFIC and Olympic Steel
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By analyzing existing cross correlation between PACIFIC GAS ELECTRIC and Olympic Steel, you can compare the effects of market volatilities on PACIFIC 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 PACIFIC with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC and Olympic Steel.
Diversification Opportunities for PACIFIC and Olympic Steel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PACIFIC and Olympic is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC GAS ELECTRIC and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and PACIFIC 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 PACIFIC GAS ELECTRIC 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 PACIFIC i.e., PACIFIC and Olympic Steel go up and down completely randomly.
Pair Corralation between PACIFIC and Olympic Steel
Assuming the 90 days trading horizon PACIFIC GAS ELECTRIC is expected to generate 0.12 times more return on investment than Olympic Steel. However, PACIFIC GAS ELECTRIC is 8.44 times less risky than Olympic Steel. It trades about 0.05 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.4 per unit of risk. If you would invest 9,796 in PACIFIC GAS ELECTRIC on September 23, 2024 and sell it today you would earn a total of 29.00 from holding PACIFIC GAS ELECTRIC or generate 0.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PACIFIC GAS ELECTRIC vs. Olympic Steel
Performance |
Timeline |
PACIFIC GAS ELECTRIC |
Olympic Steel |
PACIFIC and Olympic Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PACIFIC and Olympic Steel
The main advantage of trading using opposite PACIFIC and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC 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.PACIFIC vs. Sanyo Special Steel | PACIFIC vs. Kaiser Aluminum | PACIFIC vs. Olympic Steel | PACIFIC vs. Tenaris SA ADR |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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