Correlation Between Chemtrade Logistics and Osisko Metals

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

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

Diversification Opportunities for Chemtrade Logistics and Osisko Metals

-0.84

Correlation Coefficient

Chemtrade Logistics  Osisko Metals

Pay attention - limited upside

The 3 months correlation between Chemtrade and Osisko is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Osisko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Chemtrade Logistics 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 Chemtrade Logistics Income are associated (or correlated) with Osisko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Metals has no effect on the direction of Chemtrade Logistics i.e., Chemtrade Logistics and Osisko Metals go up and down completely randomly.

Pair Corralation between Chemtrade Logistics and Osisko Metals

Assuming the 90 days trading horizon Chemtrade Logistics Income is expected to under-perform the Osisko Metals. But the stock apears to be less risky and, when comparing its historical volatility, Chemtrade Logistics Income is 2.84 times less risky than Osisko Metals. The stock trades about -0.06 of its potential returns per unit of risk. The Osisko Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Osisko Metals on December 2, 2024 and sell it today you would earn a total of  4.00  from holding Osisko Metals or generate 11.43% return on investment over 90 days.

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

Chemtrade Logistics Income  vs.  Osisko Metals

Chemtrade Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemtrade Logistics Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Osisko Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Osisko Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chemtrade Logistics and Osisko Metals

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

The idea behind Chemtrade Logistics Income and Osisko Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.