Correlation Between Rubicon Organics and Osisko Metals

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

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

Diversification Opportunities for Rubicon Organics and Osisko Metals

0.54

Correlation Coefficient

Rubicon Organics  Osisko Metals

Very weak diversification

The 3 months correlation between Rubicon and Osisko is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Osisko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Rubicon Organics 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 Rubicon Organics are associated (or correlated) with Osisko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Metals has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Osisko Metals go up and down completely randomly.

Pair Corralation between Rubicon Organics and Osisko Metals

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 2.52 times less return on investment than Osisko Metals. In addition to that, Rubicon Organics is 1.19 times more volatile than Osisko Metals. It trades about 0.05 of its total potential returns per unit of risk. Osisko Metals is currently generating about 0.15 per unit of volatility. If you would invest  33.00  in Osisko Metals on November 29, 2024 and sell it today you would earn a total of  5.00  from holding Osisko Metals or generate 15.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Rubicon Organics  vs.  Osisko Metals

Rubicon Organics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Organics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Rubicon Organics showed solid returns over the last few months and may actually be approaching a breakup point.

Osisko Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals are ranked lower than 13 (%) 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.

Pair Trading with Rubicon Organics and Osisko Metals

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

The idea behind Rubicon Organics and Osisko Metals 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.