Correlation Between Gold Fields and Osisko Gold

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

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

Diversification Opportunities for Gold Fields and Osisko Gold

0.7

Correlation Coefficient

Gold Fields  Osisko Gold

Poor diversification

The 3 months correlation between Gold and Osisko is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd 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 Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Osisko Gold go up and down completely randomly.

Pair Corralation between Gold Fields and Osisko Gold

Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Osisko Gold. In addition to that, Gold Fields is 1.13 times more volatile than Osisko Gold Ro. It trades about -0.24 of its total potential returns per unit of risk. Osisko Gold Ro is currently generating about -0.16 per unit of volatility. If you would invest  1,930  in Osisko Gold Ro on September 24, 2024 and sell it today you would lose (101.00) from holding Osisko Gold Ro or give up 5.23% of portfolio value over 90 days.

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

Gold Fields Ltd  vs.  Osisko Gold Ro

Gold Fields

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Fields Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Osisko Gold Ro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osisko Gold Ro has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Osisko Gold is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Gold Fields and Osisko Gold

The main advantage of trading using opposite Gold Fields and Osisko Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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 Gold Fields Ltd 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.