Correlation Between Fortescue Metals and Osisko Metals
Can any of the company-specific risk be diversified away by investing in both Fortescue Metals 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 Fortescue Metals and Osisko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortescue Metals Group and Osisko Metals, you can compare the effects of market volatilities on Fortescue Metals 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 Fortescue Metals with a short position of Osisko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortescue Metals and Osisko Metals.
Diversification Opportunities for Fortescue Metals and Osisko Metals
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortescue and Osisko is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fortescue Metals Group and Osisko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Fortescue 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 Fortescue Metals Group 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 Fortescue Metals i.e., Fortescue Metals and Osisko Metals go up and down completely randomly.
Pair Corralation between Fortescue Metals and Osisko Metals
Assuming the 90 days horizon Fortescue Metals Group is expected to under-perform the Osisko Metals. But the stock apears to be less risky and, when comparing its historical volatility, Fortescue Metals Group is 2.03 times less risky than Osisko Metals. The stock trades about -0.44 of its potential returns per unit of risk. The Osisko Metals is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Osisko Metals on October 12, 2024 and sell it today you would earn a total of 6.00 from holding Osisko Metals or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortescue Metals Group vs. Osisko Metals
Performance |
| Timeline |
| Fortescue Metals |
| Osisko Metals |
Fortescue Metals and Osisko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortescue Metals and Osisko Metals
The main advantage of trading using opposite Fortescue Metals and Osisko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortescue Metals 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.| Fortescue Metals vs. Sinopec Shanghai Petrochemical | Fortescue Metals vs. Mitsui Chemicals | Fortescue Metals vs. EBRO FOODS | Fortescue Metals vs. X FAB Silicon Foundries |
| Osisko Metals vs. Japan Post Insurance | Osisko Metals vs. MAGNUM MINING EXP | Osisko Metals vs. United Insurance Holdings | Osisko Metals vs. GALENA MINING LTD |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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