Correlation Between Osisko Development and GoGold Resources

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

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

Diversification Opportunities for Osisko Development and GoGold Resources

0.55

Correlation Coefficient

Osisko Development  GoGold Resources

Very weak diversification

The 3 months correlation between Osisko and GoGold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Development Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and Osisko Development 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 Osisko Development Corp are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Osisko Development i.e., Osisko Development and GoGold Resources go up and down completely randomly.

Pair Corralation between Osisko Development and GoGold Resources

Assuming the 90 days horizon Osisko Development Corp is expected to generate 1.93 times more return on investment than GoGold Resources. However, Osisko Development is 1.93 times more volatile than GoGold Resources. It trades about -0.01 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.14 per unit of risk. If you would invest  250.00  in Osisko Development Corp on October 7, 2024 and sell it today you would lose (24.00) from holding Osisko Development Corp or give up 9.6% of portfolio value over 90 days.

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

Osisko Development Corp  vs.  GoGold Resources

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

GoGold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoGold Resources 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 fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Osisko Development and GoGold Resources

The main advantage of trading using opposite Osisko Development and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Development position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.

The idea behind Osisko Development Corp and GoGold Resources 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.