Correlation Between Blue Moon and Osisko Development

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

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

Diversification Opportunities for Blue Moon and Osisko Development

-0.62

Correlation Coefficient

Blue Moon  Osisko Development

Excellent diversification

The 3 months correlation between Blue and Osisko is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Zinc 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 Blue Moon 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 Blue Moon Zinc 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 Blue Moon i.e., Blue Moon and Osisko Development go up and down completely randomly.

Pair Corralation between Blue Moon and Osisko Development

Assuming the 90 days trading horizon Blue Moon Zinc is expected to generate 0.61 times more return on investment than Osisko Development. However, Blue Moon Zinc is 1.64 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 -0.03 per unit of risk. If you would invest  35.00  in Blue Moon Zinc on October 3, 2024 and sell it today you would earn a total of  1.00  from holding Blue Moon Zinc or generate 2.86% return on investment over 90 days.

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

Blue Moon Zinc  vs.  Osisko Development Corp

Blue Moon Zinc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Zinc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blue Moon may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Blue Moon and Osisko Development

The main advantage of trading using opposite Blue Moon and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Moon 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 Blue Moon Zinc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.