Correlation Between Osisko Metals and Cogeco Communications

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

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

Diversification Opportunities for Osisko Metals and Cogeco Communications

-0.37

Correlation Coefficient

Osisko Metals  Cogeco Communications

Very good diversification

The 3 months correlation between Osisko and Cogeco is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Osisko Metals 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 Metals are associated (or correlated) with Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of Osisko Metals i.e., Osisko Metals and Cogeco Communications go up and down completely randomly.

Pair Corralation between Osisko Metals and Cogeco Communications

Given the investment horizon of 90 days Osisko Metals is expected to generate 3.32 times more return on investment than Cogeco Communications. However, Osisko Metals is 3.32 times more volatile than Cogeco Communications. It trades about 0.41 of its potential returns per unit of risk. Cogeco Communications is currently generating about -0.06 per unit of risk. If you would invest  26.00  in Osisko Metals on October 9, 2024 and sell it today you would earn a total of  10.00  from holding Osisko Metals or generate 38.46% return on investment over 90 days.

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

Osisko Metals  vs.  Cogeco Communications

Osisko Metals

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Osisko Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Cogeco Communications

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cogeco Communications is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Osisko Metals and Cogeco Communications

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

The idea behind Osisko Metals and Cogeco Communications 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.