Correlation Between Osisko Gold and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Osisko Gold and SilverCrest 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 Osisko Gold and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osisko Gold Ro and SilverCrest Metals, you can compare the effects of market volatilities on Osisko Gold and SilverCrest 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 Osisko Gold with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Gold and SilverCrest Metals.
Diversification Opportunities for Osisko Gold and SilverCrest Metals
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Osisko and SilverCrest is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Osisko Gold 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 Gold Ro are associated (or correlated) with SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Osisko Gold i.e., Osisko Gold and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Osisko Gold and SilverCrest Metals
Assuming the 90 days horizon Osisko Gold Ro is expected to generate 0.48 times more return on investment than SilverCrest Metals. However, Osisko Gold Ro is 2.08 times less risky than SilverCrest Metals. It trades about 0.04 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.01 per unit of risk. If you would invest 2,683 in Osisko Gold Ro on September 19, 2024 and sell it today you would earn a total of 35.00 from holding Osisko Gold Ro or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Osisko Gold Ro vs. SilverCrest Metals
Performance |
| Timeline |
| Osisko Gold Ro |
| SilverCrest Metals |
Osisko Gold and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Gold and SilverCrest Metals
The main advantage of trading using opposite Osisko Gold and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Gold position performs unexpectedly, SilverCrest 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.The idea behind Osisko Gold Ro and SilverCrest Metals 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.| SilverCrest Metals vs. Outcrop Gold Corp | SilverCrest Metals vs. Strikepoint Gold | SilverCrest Metals vs. Defiance Silver Corp | SilverCrest Metals vs. Eskay Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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