Correlation Between Osisko Metals and Fuyao Glass

Can any of the company-specific risk be diversified away by investing in both Osisko Metals and Fuyao Glass 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 Osisko Metals and Fuyao Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Osisko Metals and Fuyao Glass Industry, you can compare the effects of market volatilities on Osisko Metals and Fuyao Glass 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 Osisko Metals with a short position of Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and Fuyao Glass.

Diversification Opportunities for Osisko Metals and Fuyao Glass

0.16

Correlation Coefficient

Osisko Metals  Fuyao Glass

Average diversification

The 3 months correlation between Osisko and Fuyao is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry and Osisko Metals 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 Osisko Metals are associated (or correlated) with Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of Osisko Metals i.e., Osisko Metals and Fuyao Glass go up and down completely randomly.

Pair Corralation between Osisko Metals and Fuyao Glass

Assuming the 90 days trading horizon Osisko Metals is expected to generate 2.79 times more return on investment than Fuyao Glass. However, Osisko Metals is 2.79 times more volatile than Fuyao Glass Industry. It trades about 0.23 of its potential returns per unit of risk. Fuyao Glass Industry is currently generating about -0.04 per unit of risk. If you would invest  16.00  in Osisko Metals on October 7, 2024 and sell it today you would earn a total of  7.00  from holding Osisko Metals or generate 43.75% return on investment over 90 days.

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

Osisko Metals  vs.  Fuyao Glass Industry

Osisko Metals

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Osisko Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fuyao Glass Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fuyao Glass Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fuyao Glass is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Osisko Metals and Fuyao Glass

The main advantage of trading using opposite Osisko Metals and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Metals position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.

The idea behind Osisko Metals and Fuyao Glass Industry 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.