Correlation Between Meta Platforms and Osisko Mining

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Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Osisko Mining 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 Meta Platforms and Osisko Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Osisko Mining, you can compare the effects of market volatilities on Meta Platforms and Osisko Mining 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 Meta Platforms with a short position of Osisko Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Osisko Mining.

Diversification Opportunities for Meta Platforms and Osisko Mining

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Meta and Osisko is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Osisko Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Mining and Meta Platforms 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 Meta Platforms are associated (or correlated) with Osisko Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Mining has no effect on the direction of Meta Platforms i.e., Meta Platforms and Osisko Mining go up and down completely randomly.

Pair Corralation between Meta Platforms and Osisko Mining

Given the investment horizon of 90 days Meta Platforms is expected to generate 13.09 times more return on investment than Osisko Mining. However, Meta Platforms is 13.09 times more volatile than Osisko Mining. It trades about 0.06 of its potential returns per unit of risk. Osisko Mining is currently generating about -0.59 per unit of risk. If you would invest  58,154  in Meta Platforms on October 22, 2024 and sell it today you would earn a total of  3,123  from holding Meta Platforms or generate 5.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy11.29%
ValuesDaily Returns

Meta Platforms  vs.  Osisko Mining

 Performance 
       Timeline  
Meta Platforms 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Meta Platforms may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Osisko Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Osisko Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Osisko Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Meta Platforms and Osisko Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meta Platforms and Osisko Mining

The main advantage of trading using opposite Meta Platforms and Osisko Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Osisko Mining 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 Mining will offset losses from the drop in Osisko Mining's long position.
The idea behind Meta Platforms and Osisko Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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