Correlation Between Osisko Development and Ivanhoe Electric

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

Diversification Opportunities for Osisko Development and Ivanhoe Electric

0.73

Correlation Coefficient

Osisko Development  Ivanhoe Electric

Poor diversification

The 3 months correlation between Osisko and Ivanhoe is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Development Corp and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Osisko Development i.e., Osisko Development and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Osisko Development and Ivanhoe Electric

Considering the 90-day investment horizon Osisko Development Corp is expected to generate 0.75 times more return on investment than Ivanhoe Electric. However, Osisko Development Corp is 1.34 times less risky than Ivanhoe Electric. It trades about -0.03 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.03 per unit of risk. If you would invest  163.00  in Osisko Development Corp on December 28, 2024 and sell it today you would lose (13.00) from holding Osisko Development Corp or give up 7.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Osisko Development Corp  vs.  Ivanhoe Electric

Osisko Development Corp

Risk-Adjusted Performance

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 fairly stable fundamental indicators, Osisko Development is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Osisko Development and Ivanhoe Electric

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

The idea behind Osisko Development Corp and Ivanhoe Electric 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.