Correlation Between Dakota Gold and Osisko Gold

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

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

Diversification Opportunities for Dakota Gold and Osisko Gold

0.31

Correlation Coefficient

Dakota Gold  Osisko Gold

Weak diversification

The 3 months correlation between Dakota and Osisko is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dakota Gold Corp and Osisko Gold Ro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Gold Ro and Dakota Gold 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 Dakota Gold Corp are associated (or correlated) with Osisko Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Gold Ro has no effect on the direction of Dakota Gold i.e., Dakota Gold and Osisko Gold go up and down completely randomly.

Pair Corralation between Dakota Gold and Osisko Gold

Allowing for the 90-day total investment horizon Dakota Gold is expected to generate 1.07 times less return on investment than Osisko Gold. In addition to that, Dakota Gold is 1.12 times more volatile than Osisko Gold Ro. It trades about 0.06 of its total potential returns per unit of risk. Osisko Gold Ro is currently generating about 0.07 per unit of volatility. If you would invest  1,859  in Osisko Gold Ro on September 15, 2024 and sell it today you would earn a total of  48.00  from holding Osisko Gold Ro or generate 2.58% return on investment over 90 days.

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

Dakota Gold Corp  vs.  Osisko Gold Ro

Dakota Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dakota Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dakota Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Osisko Gold Ro

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Osisko Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dakota Gold and Osisko Gold

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

The idea behind Dakota Gold Corp and Osisko Gold Ro 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.