Correlation Between Osisko Metals and Canada Nickel

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

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

Diversification Opportunities for Osisko Metals and Canada Nickel

-0.6

Correlation Coefficient

Osisko Metals  Canada Nickel

Excellent diversification

The 3 months correlation between Osisko and Canada is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals Incorporated and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Incorporated are associated (or correlated) with Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Osisko Metals i.e., Osisko Metals and Canada Nickel go up and down completely randomly.

Pair Corralation between Osisko Metals and Canada Nickel

Assuming the 90 days horizon Osisko Metals Incorporated is expected to generate 2.12 times more return on investment than Canada Nickel. However, Osisko Metals is 2.12 times more volatile than Canada Nickel. It trades about 0.08 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.04 per unit of risk. If you would invest  16.00  in Osisko Metals Incorporated on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Osisko Metals Incorporated or generate 6.25% return on investment over 90 days.

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

Osisko Metals Incorporated  vs.  Canada Nickel

Osisko Metals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Osisko Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Canada Nickel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Nickel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Canada Nickel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Osisko Metals and Canada Nickel

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

The idea behind Osisko Metals Incorporated and Canada Nickel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.