Correlation Between Harmony Gold and Osisko Development

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

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

Diversification Opportunities for Harmony Gold and Osisko Development

0.64

Correlation Coefficient

Harmony Gold  Osisko Development

Poor diversification

The 3 months correlation between Harmony and Osisko is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining 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 Harmony 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 Harmony Gold Mining 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 Harmony Gold i.e., Harmony Gold and Osisko Development go up and down completely randomly.

Pair Corralation between Harmony Gold and Osisko Development

Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.84 times more return on investment than Osisko Development. However, Harmony Gold Mining is 1.19 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 -0.04 per unit of risk. If you would invest  328.00  in Harmony Gold Mining on October 1, 2024 and sell it today you would earn a total of  496.00  from holding Harmony Gold Mining or generate 151.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Harmony Gold Mining  vs.  Osisko Development Corp

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing 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 uncertain performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Harmony Gold and Osisko Development

The main advantage of trading using opposite Harmony Gold and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold 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 Harmony Gold Mining 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.