Correlation Between Gold Royalty and Osisko Development

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

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

Diversification Opportunities for Gold Royalty and Osisko Development

0.47

Correlation Coefficient

Gold Royalty  Osisko Development

Very weak diversification

The 3 months correlation between Gold and Osisko is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gold Royalty Corp 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 Gold Royalty 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 Royalty Corp 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 Gold Royalty i.e., Gold Royalty and Osisko Development go up and down completely randomly.

Pair Corralation between Gold Royalty and Osisko Development

Given the investment horizon of 90 days Gold Royalty Corp is expected to under-perform the Osisko Development. But the stock apears to be less risky and, when comparing its historical volatility, Gold Royalty Corp is 1.91 times less risky than Osisko Development. The stock trades about -0.03 of its potential returns per unit of risk. The Osisko Development Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Osisko Development Corp on September 22, 2024 and sell it today you would lose (19.00) from holding Osisko Development Corp or give up 7.17% of portfolio value over 90 days.

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

Gold Royalty Corp  vs.  Osisko Development Corp

Gold Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 basic indicators, Osisko Development is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gold Royalty and Osisko Development

The main advantage of trading using opposite Gold Royalty and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Royalty 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 Gold Royalty Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.