Correlation Between Osisko Metals and Eramet SA
Can any of the company-specific risk be diversified away by investing in both Osisko Metals and Eramet SA 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 Eramet SA 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 Eramet SA ADR, you can compare the effects of market volatilities on Osisko Metals and Eramet SA 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 Eramet SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Metals and Eramet SA.
Diversification Opportunities for Osisko Metals and Eramet SA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Osisko and Eramet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Metals Incorporated and Eramet SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eramet SA ADR 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 Eramet SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eramet SA ADR has no effect on the direction of Osisko Metals i.e., Osisko Metals and Eramet SA go up and down completely randomly.
Pair Corralation between Osisko Metals and Eramet SA
Assuming the 90 days horizon Osisko Metals Incorporated is expected to generate 1.65 times more return on investment than Eramet SA. However, Osisko Metals is 1.65 times more volatile than Eramet SA ADR. It trades about 0.12 of its potential returns per unit of risk. Eramet SA ADR is currently generating about -0.11 per unit of risk. If you would invest 16.00 in Osisko Metals Incorporated on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Osisko Metals Incorporated or generate 12.5% 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. Eramet SA ADR
Performance |
| Timeline |
| Osisko Metals |
| Eramet SA ADR |
Osisko Metals and Eramet SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Metals and Eramet SA
The main advantage of trading using opposite Osisko Metals and Eramet SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Metals position performs unexpectedly, Eramet SA 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 Eramet SA will offset losses from the drop in Eramet SA's long position.| Osisko Metals vs. C3 Metals | Osisko Metals vs. Syrah Resources Limited | Osisko Metals vs. Saint Jean Carbon | Osisko Metals vs. Volt Lithium Corp |
| Eramet SA vs. Rockridge Resources | Eramet SA vs. Ameriwest Lithium | Eramet SA vs. Osisko Metals Incorporated | Eramet SA vs. Volt Lithium Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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