Correlation Between Fortuna Silver and Osisko Development

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

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

Diversification Opportunities for Fortuna Silver and Osisko Development

0.23

Correlation Coefficient

Fortuna Silver  Osisko Development

Modest diversification

The 3 months correlation between Fortuna and Osisko is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Osisko Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Development Corp and Fortuna Silver 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 Fortuna Silver Mines are associated (or correlated) with Osisko Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Development Corp has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Osisko Development go up and down completely randomly.

Pair Corralation between Fortuna Silver and Osisko Development

Considering the 90-day investment horizon Fortuna Silver Mines is expected to generate 0.52 times more return on investment than Osisko Development. However, Fortuna Silver Mines is 1.94 times less risky than Osisko Development. It trades about 0.07 of its potential returns per unit of risk. Osisko Development Corp is currently generating about 0.01 per unit of risk. If you would invest  424.00  in Fortuna Silver Mines on September 3, 2024 and sell it today you would earn a total of  54.00  from holding Fortuna Silver Mines or generate 12.74% return on investment over 90 days.

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

Fortuna Silver Mines  vs.  Osisko Development Corp

Fortuna Silver Mines

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fortuna Silver Mines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fortuna Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Osisko Development Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osisko Development Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Osisko Development is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fortuna Silver and Osisko Development

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

The idea behind Fortuna Silver Mines and Osisko Development Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.