Correlation Between Franco Nevada and Osisko Development
Can any of the company-specific risk be diversified away by investing in both Franco Nevada and Osisko Development 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 Franco Nevada and Osisko Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franco Nevada and Osisko Development Corp, you can compare the effects of market volatilities on Franco Nevada and Osisko Development 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 Franco Nevada with a short position of Osisko Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franco Nevada and Osisko Development.
Diversification Opportunities for Franco Nevada and Osisko Development
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franco and Osisko is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Franco Nevada and Osisko Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Development Corp and Franco Nevada 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 Franco Nevada are associated (or correlated) with Osisko Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Development Corp has no effect on the direction of Franco Nevada i.e., Franco Nevada and Osisko Development go up and down completely randomly.
Pair Corralation between Franco Nevada and Osisko Development
Considering the 90-day investment horizon Franco Nevada is expected to generate 51.15 times less return on investment than Osisko Development. But when comparing it to its historical volatility, Franco Nevada is 27.94 times less risky than Osisko Development. It trades about 0.04 of its potential returns per unit of risk. Osisko Development Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Osisko Development Corp on September 4, 2024 and sell it today you would lose (10.00) from holding Osisko Development Corp or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.83% |
| Values | Daily Returns |
Franco Nevada vs. Osisko Development Corp
Performance |
| Timeline |
| Franco Nevada |
| Osisko Development Corp |
Franco Nevada and Osisko Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franco Nevada and Osisko Development
The main advantage of trading using opposite Franco Nevada and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franco Nevada position performs unexpectedly, Osisko Development 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 Development will offset losses from the drop in Osisko Development's long position.| Franco Nevada vs. Royal Gold | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Pan American Silver | Franco Nevada vs. Sandstorm Gold Ltd |
| Osisko Development vs. Titan Machinery | Osisko Development vs. Fast Retailing Co | Osisko Development vs. SunLink Health Systems | Osisko Development vs. Baozun Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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