Correlation Between International Lithium and Osisko Metals
Can any of the company-specific risk be diversified away by investing in both International Lithium 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 International Lithium and Osisko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Lithium Corp and Osisko Metals Incorporated, you can compare the effects of market volatilities on International Lithium 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 International Lithium with a short position of Osisko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Osisko Metals.
Diversification Opportunities for International Lithium and Osisko Metals
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Osisko is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Osisko Metals Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and International Lithium 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 International Lithium Corp 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 International Lithium i.e., International Lithium and Osisko Metals go up and down completely randomly.
Pair Corralation between International Lithium and Osisko Metals
Assuming the 90 days horizon International Lithium Corp is expected to generate 2.28 times more return on investment than Osisko Metals. However, International Lithium is 2.28 times more volatile than Osisko Metals Incorporated. It trades about 0.06 of its potential returns per unit of risk. Osisko Metals Incorporated is currently generating about 0.08 per unit of risk. If you would invest 1.29 in International Lithium Corp on September 1, 2024 and sell it today you would earn a total of 0.01 from holding International Lithium Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. Osisko Metals Incorporated
Performance |
| Timeline |
| International Lithium |
| Osisko Metals |
International Lithium and Osisko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and Osisko Metals
The main advantage of trading using opposite International Lithium and Osisko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium 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.| International Lithium vs. Decade Resources | International Lithium vs. Silver Spruce Resources | International Lithium vs. Grid Metals Corp | International Lithium vs. Canada Rare Earth |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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