Correlation Between Osisko Metals and Greenfire Resources

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

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

Diversification Opportunities for Osisko Metals and Greenfire Resources

-0.46

Correlation Coefficient

Osisko Metals  Greenfire Resources

Very good diversification

The 3 months correlation between Osisko and Greenfire is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and Greenfire Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenfire Resources 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 Greenfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenfire Resources has no effect on the direction of Osisko Metals i.e., Osisko Metals and Greenfire Resources go up and down completely randomly.

Pair Corralation between Osisko Metals and Greenfire Resources

Given the investment horizon of 90 days Osisko Metals is expected to generate 1.66 times more return on investment than Greenfire Resources. However, Osisko Metals is 1.66 times more volatile than Greenfire Resources. It trades about 0.21 of its potential returns per unit of risk. Greenfire Resources is currently generating about 0.01 per unit of risk. If you would invest  21.00  in Osisko Metals on October 3, 2024 and sell it today you would earn a total of  15.00  from holding Osisko Metals or generate 71.43% return on investment over 90 days.

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

Osisko Metals  vs.  Greenfire Resources

Osisko Metals

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Osisko Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Greenfire Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenfire Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Greenfire Resources 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 Greenfire Resources

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

The idea behind Osisko Metals and Greenfire 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.