Correlation Between Osisko Development and IAMGold

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

Diversification Opportunities for Osisko Development and IAMGold

0.2

Correlation Coefficient

Osisko Development  IAMGold

Modest diversification

The 3 months correlation between Osisko and IAMGold is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Development Corp and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold 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 IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Osisko Development i.e., Osisko Development and IAMGold go up and down completely randomly.

Pair Corralation between Osisko Development and IAMGold

Considering the 90-day investment horizon Osisko Development Corp is expected to generate 0.96 times more return on investment than IAMGold. However, Osisko Development Corp is 1.04 times less risky than IAMGold. It trades about -0.11 of its potential returns per unit of risk. IAMGold is currently generating about -0.12 per unit of risk. If you would invest  190.00  in Osisko Development Corp on September 22, 2024 and sell it today you would lose (15.00) from holding Osisko Development Corp or give up 7.89% of portfolio value over 90 days.

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

Osisko Development Corp  vs.  IAMGold

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

IAMGold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Osisko Development and IAMGold

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

The idea behind Osisko Development Corp and IAMGold 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.