Correlation Between GoldMining and Osisko Development

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

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

Diversification Opportunities for GoldMining and Osisko Development

-0.3

Correlation Coefficient

GoldMining  Osisko Development

Very good diversification

The 3 months correlation between GoldMining and Osisko is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Osisko Development go up and down completely randomly.

Pair Corralation between GoldMining and Osisko Development

Given the investment horizon of 90 days GoldMining is expected to generate 0.74 times more return on investment than Osisko Development. However, GoldMining is 1.35 times less risky than Osisko Development. It trades about 0.03 of its potential returns per unit of risk. Osisko Development Corp is currently generating about -0.04 per unit of risk. If you would invest  80.00  in GoldMining on December 29, 2024 and sell it today you would earn a total of  2.00  from holding GoldMining or generate 2.5% return on investment over 90 days.

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

GoldMining  vs.  Osisko Development Corp

GoldMining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, GoldMining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Osisko Development Corp

Risk-Adjusted Performance

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 latest weak performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with GoldMining and Osisko Development

The main advantage of trading using opposite GoldMining and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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 GoldMining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.