Correlation Between Osisko Metals and Canadian Palladium
Can any of the company-specific risk be diversified away by investing in both Osisko Metals and Canadian Palladium 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 Osisko Metals and Canadian Palladium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osisko Metals Incorporated and Canadian Palladium Resources, you can compare the effects of market volatilities on Osisko Metals and Canadian Palladium 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 Osisko Metals with a short position of Canadian Palladium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and Canadian Palladium.
Diversification Opportunities for Osisko Metals and Canadian Palladium
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Osisko and Canadian is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals Incorporated and Canadian Palladium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Palladium and Osisko 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 Osisko Metals Incorporated are associated (or correlated) with Canadian Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Palladium has no effect on the direction of Osisko Metals i.e., Osisko Metals and Canadian Palladium go up and down completely randomly.
Pair Corralation between Osisko Metals and Canadian Palladium
Assuming the 90 days horizon Osisko Metals Incorporated is expected to generate 0.49 times more return on investment than Canadian Palladium. However, Osisko Metals Incorporated is 2.06 times less risky than Canadian Palladium. It trades about 0.08 of its potential returns per unit of risk. Canadian Palladium Resources is currently generating about -0.13 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Osisko Metals Incorporated vs. Canadian Palladium Resources
Performance |
| Timeline |
| Osisko Metals |
| Canadian Palladium |
Osisko Metals and Canadian Palladium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Metals and Canadian Palladium
The main advantage of trading using opposite Osisko Metals and Canadian Palladium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Metals position performs unexpectedly, Canadian Palladium 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 Canadian Palladium will offset losses from the drop in Canadian Palladium's long position.| Osisko Metals vs. ATT Inc | Osisko Metals vs. Merck Company | Osisko Metals vs. Walt Disney | Osisko Metals vs. Caterpillar |
| Canadian Palladium vs. ATT Inc | Canadian Palladium vs. Merck Company | Canadian Palladium vs. Walt Disney | Canadian Palladium 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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