Correlation Between Osisko Metals and Devonian Health

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

By analyzing existing cross correlation between Osisko Metals and Devonian Health Group, you can compare the effects of market volatilities on Osisko Metals and Devonian Health 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 Devonian Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and Devonian Health.

Diversification Opportunities for Osisko Metals and Devonian Health

0.32

Correlation Coefficient

Osisko Metals  Devonian Health

Weak diversification

The 3 months correlation between Osisko and Devonian is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and Devonian Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Devonian Health Group 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 Devonian Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Devonian Health Group has no effect on the direction of Osisko Metals i.e., Osisko Metals and Devonian Health go up and down completely randomly.

Pair Corralation between Osisko Metals and Devonian Health

Given the investment horizon of 90 days Osisko Metals is expected to generate 1.01 times less return on investment than Devonian Health. But when comparing it to its historical volatility, Osisko Metals is 2.77 times less risky than Devonian Health. It trades about 0.19 of its potential returns per unit of risk. Devonian Health Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Devonian Health Group on October 12, 2024 and sell it today you would earn a total of  1.00  from holding Devonian Health Group or generate 6.25% return on investment over 90 days.

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

Osisko Metals  vs.  Devonian Health Group

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.

Devonian Health Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Devonian Health Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Devonian Health showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osisko Metals and Devonian Health

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

The idea behind Osisko Metals and Devonian Health Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..