Correlation Between Osisko Development and Gold Royalty

Can any of the company-specific risk be diversified away by investing in both Osisko Development and Gold Royalty 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 Gold Royalty 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 Gold Royalty Corp, you can compare the effects of market volatilities on Osisko Development and Gold Royalty 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 Gold Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Development and Gold Royalty.

Diversification Opportunities for Osisko Development and Gold Royalty

0.55

Correlation Coefficient

Osisko Development  Gold Royalty

Very weak diversification

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

Pair Corralation between Osisko Development and Gold Royalty

Assuming the 90 days horizon Osisko Development Corp is expected to under-perform the Gold Royalty. In addition to that, Osisko Development is 1.28 times more volatile than Gold Royalty Corp. It trades about -0.03 of its total potential returns per unit of risk. Gold Royalty Corp is currently generating about -0.03 per unit of volatility. If you would invest  231.00  in Gold Royalty Corp on October 3, 2024 and sell it today you would lose (110.00) from holding Gold Royalty Corp or give up 47.62% of portfolio value over 90 days.

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

Osisko Development Corp  vs.  Gold Royalty Corp

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.

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.

Pair Trading with Osisko Development and Gold Royalty

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

The idea behind Osisko Development Corp and Gold Royalty 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.