Correlation Between Osisko Metals and CECO ENVIRONMENTAL

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

By analyzing existing cross correlation between Osisko Metals and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on Osisko Metals and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and CECO ENVIRONMENTAL.

Diversification Opportunities for Osisko Metals and CECO ENVIRONMENTAL

0.58

Correlation Coefficient

Osisko Metals  CECO ENVIRONMENTAL

Very weak diversification

The 3 months correlation between Osisko and CECO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of Osisko Metals i.e., Osisko Metals and CECO ENVIRONMENTAL go up and down completely randomly.

Pair Corralation between Osisko Metals and CECO ENVIRONMENTAL

Assuming the 90 days trading horizon Osisko Metals is expected to generate 0.87 times more return on investment than CECO ENVIRONMENTAL. However, Osisko Metals is 1.14 times less risky than CECO ENVIRONMENTAL. It trades about 0.17 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about 0.08 per unit of risk. If you would invest  14.00  in Osisko Metals on October 23, 2024 and sell it today you would earn a total of  6.00  from holding Osisko Metals or generate 42.86% return on investment over 90 days.

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

Osisko Metals  vs.  CECO ENVIRONMENTAL

Osisko Metals

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Osisko Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

CECO ENVIRONMENTAL

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CECO ENVIRONMENTAL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CECO ENVIRONMENTAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osisko Metals and CECO ENVIRONMENTAL

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

The idea behind Osisko Metals and CECO ENVIRONMENTAL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.