Correlation Between Olympic Steel and Weyco
Can any of the company-specific risk be diversified away by investing in both Olympic Steel and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Weyco Group, you can compare the effects of market volatilities on Olympic Steel and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Weyco.
Diversification Opportunities for Olympic Steel and Weyco
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Olympic and Weyco is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Olympic Steel i.e., Olympic Steel and Weyco go up and down completely randomly.
Pair Corralation between Olympic Steel and Weyco
Given the investment horizon of 90 days Olympic Steel is expected to under-perform the Weyco. In addition to that, Olympic Steel is 1.59 times more volatile than Weyco Group. It trades about -0.04 of its total potential returns per unit of risk. Weyco Group is currently generating about -0.06 per unit of volatility. If you would invest 3,574 in Weyco Group on December 2, 2024 and sell it today you would lose (96.00) from holding Weyco Group or give up 2.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Olympic Steel vs. Weyco Group
Performance |
Timeline |
Olympic Steel |
Weyco Group |
Olympic Steel and Weyco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Olympic Steel and Weyco
The main advantage of trading using opposite Olympic Steel and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings | Olympic Steel vs. Steel Dynamics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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