Correlation Between Osisko Gold and Northern Star
Can any of the company-specific risk be diversified away by investing in both Osisko Gold and Northern Star 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 Northern Star 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 Northern Star Resources, you can compare the effects of market volatilities on Osisko Gold and Northern Star 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 Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Gold and Northern Star.
Diversification Opportunities for Osisko Gold and Northern Star
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Osisko and Northern is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources 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 Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Osisko Gold i.e., Osisko Gold and Northern Star go up and down completely randomly.
Pair Corralation between Osisko Gold and Northern Star
Allowing for the 90-day total investment horizon Osisko Gold Ro is expected to under-perform the Northern Star. But the stock apears to be less risky and, when comparing its historical volatility, Osisko Gold Ro is 1.31 times less risky than Northern Star. The stock trades about -0.17 of its potential returns per unit of risk. The Northern Star Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Northern Star Resources on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Northern Star Resources or generate 2.24% 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. Northern Star Resources
Performance |
| Timeline |
| Osisko Gold Ro |
| Northern Star Resources |
Osisko Gold and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Gold and Northern Star
The main advantage of trading using opposite Osisko Gold and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Gold position performs unexpectedly, Northern Star 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 Northern Star will offset losses from the drop in Northern Star's long position.| Osisko Gold vs. Wheaton Precious Metals | Osisko Gold vs. Franco Nevada | Osisko Gold vs. Royal Gold | Osisko Gold vs. Fortuna Silver Mines |
| Northern Star vs. Regis Resources | Northern Star vs. West African Resources | Northern Star vs. Dundee Precious Metals | Northern Star vs. Maple Gold Mines |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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