Correlation Between GM and Osisko Gold
Can any of the company-specific risk be diversified away by investing in both GM and Osisko Gold 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 GM and Osisko Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Osisko Gold Ro, you can compare the effects of market volatilities on GM and Osisko Gold 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 GM with a short position of Osisko Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Osisko Gold.
Diversification Opportunities for GM and Osisko Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Osisko is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Osisko Gold Ro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Gold Ro and GM 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 General Motors are associated (or correlated) with Osisko Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Gold Ro has no effect on the direction of GM i.e., GM and Osisko Gold go up and down completely randomly.
Pair Corralation between GM and Osisko Gold
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.1 times more return on investment than Osisko Gold. However, GM is 1.1 times more volatile than Osisko Gold Ro. It trades about 0.15 of its potential returns per unit of risk. Osisko Gold Ro is currently generating about 0.08 per unit of risk. If you would invest 2,858 in General Motors on August 24, 2024 and sell it today you would earn a total of 2,990 from holding General Motors or generate 104.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Osisko Gold Ro
Performance |
| Timeline |
| General Motors |
| Osisko Gold Ro |
GM and Osisko Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Osisko Gold
The main advantage of trading using opposite GM and Osisko Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Osisko Gold 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 Gold will offset losses from the drop in Osisko Gold's long position.The idea behind General Motors and Osisko Gold Ro 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.| Osisko Gold vs. Wheaton Precious Metals | Osisko Gold vs. Franco Nevada | Osisko Gold vs. Royal Gold | Osisko Gold vs. Fortuna Silver Mines |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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