Correlation Between Kandi Technologies and Olympic Steel

Can any of the company-specific risk be diversified away by investing in both Kandi Technologies 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 Kandi Technologies and Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kandi Technologies Group and Olympic Steel, you can compare the effects of market volatilities on Kandi Technologies 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 Kandi Technologies with a short position of Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Olympic Steel.

Diversification Opportunities for Kandi Technologies and Olympic Steel

-0.07

Correlation Coefficient

Kandi Technologies  Olympic Steel

Good diversification

The 3 months correlation between Kandi and Olympic is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel and Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Olympic Steel go up and down completely randomly.

Pair Corralation between Kandi Technologies and Olympic Steel

Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Olympic Steel. But the stock apears to be less risky and, when comparing its historical volatility, Kandi Technologies Group is 1.08 times less risky than Olympic Steel. The stock trades about -0.69 of its potential returns per unit of risk. The Olympic Steel is currently generating about -0.45 of returns per unit of risk over similar time horizon. If you would invest  4,287  in Olympic Steel on September 26, 2024 and sell it today you would lose (935.00) from holding Olympic Steel or give up 21.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kandi Technologies Group  vs.  Olympic Steel

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Olympic Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olympic Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kandi Technologies and Olympic Steel

The main advantage of trading using opposite Kandi Technologies and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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 Kandi Technologies Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.