Correlation Between Osisko Metals and Bank of America
Can any of the company-specific risk be diversified away by investing in both Osisko Metals and Bank of America 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 Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osisko Metals and Verizon Communications, you can compare the effects of market volatilities on Osisko Metals and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and Bank of America.
Diversification Opportunities for Osisko Metals and Bank of America
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Osisko and Bank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Osisko Metals i.e., Osisko Metals and Bank of America go up and down completely randomly.
Pair Corralation between Osisko Metals and Bank of America
Assuming the 90 days trading horizon Osisko Metals is expected to generate 3.34 times more return on investment than Bank of America. However, Osisko Metals is 3.34 times more volatile than Verizon Communications. It trades about 0.02 of its potential returns per unit of risk. Verizon Communications is currently generating about 0.04 per unit of risk. If you would invest 21.00 in Osisko Metals on October 29, 2024 and sell it today you would earn a total of 0.00 from holding Osisko Metals or generate 0.0% 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. Verizon Communications
Performance |
| Timeline |
| Osisko Metals |
| Verizon Communications |
Osisko Metals and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Metals and Bank of America
The main advantage of trading using opposite Osisko Metals and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Metals position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Osisko Metals vs. INDO RAMA SYNTHETIC | Osisko Metals vs. Mitsubishi Gas Chemical | Osisko Metals vs. TRI CHEMICAL LABORATINC | Osisko Metals vs. TRAVEL LEISURE DL 01 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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