Correlation Between Osisko Metals and InPlay Oil

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

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

Diversification Opportunities for Osisko Metals and InPlay Oil

-0.47

Correlation Coefficient

Osisko Metals  InPlay Oil

Very good diversification

The 3 months correlation between Osisko and InPlay is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Osisko Metals i.e., Osisko Metals and InPlay Oil go up and down completely randomly.

Pair Corralation between Osisko Metals and InPlay Oil

Given the investment horizon of 90 days Osisko Metals is expected to generate 1.98 times more return on investment than InPlay Oil. However, Osisko Metals is 1.98 times more volatile than InPlay Oil Corp. It trades about 0.15 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about 0.03 per unit of risk. If you would invest  32.00  in Osisko Metals on December 26, 2024 and sell it today you would earn a total of  14.00  from holding Osisko Metals or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Osisko Metals  vs.  InPlay Oil Corp

Osisko Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 11 (%) 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.

InPlay Oil Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in InPlay Oil Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, InPlay Oil is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Osisko Metals and InPlay Oil

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

The idea behind Osisko Metals and InPlay Oil Corp 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.