Correlation Between Osisko Gold and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Osisko Gold and Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals, you can compare the effects of market volatilities on Osisko Gold and Hudbay Minerals 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 Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Gold and Hudbay Minerals.
Diversification Opportunities for Osisko Gold and Hudbay Minerals
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Osisko and Hudbay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals 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 Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Osisko Gold i.e., Osisko Gold and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Osisko Gold and Hudbay Minerals
Allowing for the 90-day total investment horizon Osisko Gold Ro is expected to under-perform the Hudbay Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Osisko Gold Ro is 1.36 times less risky than Hudbay Minerals. The stock trades about -0.14 of its potential returns per unit of risk. The Hudbay Minerals is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 958.00 in Hudbay Minerals on August 28, 2024 and sell it today you would lose (54.00) from holding Hudbay Minerals or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Osisko Gold Ro vs. Hudbay Minerals
Performance |
| Timeline |
| Osisko Gold Ro |
| Hudbay Minerals |
Osisko Gold and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Gold and Hudbay Minerals
The main advantage of trading using opposite Osisko Gold and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Gold position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.The idea behind Osisko Gold Ro and Hudbay Minerals 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.| Hudbay Minerals vs. Labrador Gold Corp | Hudbay Minerals vs. Aurion Resources | Hudbay Minerals vs. Puma Exploration | Hudbay Minerals vs. Golden Star Resource |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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