Correlation Between Base Resources and Osisko Metals
Can any of the company-specific risk be diversified away by investing in both Base Resources 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 Base Resources and Osisko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Base Resources Limited and Osisko Metals Incorporated, you can compare the effects of market volatilities on Base Resources 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 Base Resources with a short position of Osisko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Base Resources and Osisko Metals.
Diversification Opportunities for Base Resources and Osisko Metals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Base and Osisko is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Base Resources Limited and Osisko Metals Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Base Resources 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 Base Resources Limited 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 Base Resources i.e., Base Resources and Osisko Metals go up and down completely randomly.
Pair Corralation between Base Resources and Osisko Metals
If you would invest 16.00 in Osisko Metals Incorporated on September 1, 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 Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Base Resources Limited vs. Osisko Metals Incorporated
Performance |
| Timeline |
| Base Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Osisko Metals |
Base Resources and Osisko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Base Resources and Osisko Metals
The main advantage of trading using opposite Base Resources and Osisko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Base Resources 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.| Base Resources vs. Macmahon Holdings Limited | Base Resources vs. Rokmaster Resources Corp | Base Resources vs. Hudson Resources | Base Resources vs. Thunder Gold Corp |
| Osisko Metals vs. ATT Inc | Osisko Metals vs. Merck Company | Osisko Metals vs. Walt Disney | Osisko Metals vs. Caterpillar |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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