Correlation Between River and Osisko Gold

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Can any of the company-specific risk be diversified away by investing in both River and Osisko Gold 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 River and Osisko Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between River and Mercantile and Osisko Gold Royalties, you can compare the effects of market volatilities on River and Osisko Gold 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 River with a short position of Osisko Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of River and Osisko Gold.

Diversification Opportunities for River and Osisko Gold

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between River and Osisko is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding River and Mercantile and Osisko Gold Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Gold Royalties and River 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 River and Mercantile are associated (or correlated) with Osisko Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Gold Royalties has no effect on the direction of River i.e., River and Osisko Gold go up and down completely randomly.

Pair Corralation between River and Osisko Gold

Assuming the 90 days trading horizon River and Mercantile is expected to under-perform the Osisko Gold. But the stock apears to be less risky and, when comparing its historical volatility, River and Mercantile is 2.53 times less risky than Osisko Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Osisko Gold Royalties is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,660  in Osisko Gold Royalties on September 1, 2024 and sell it today you would earn a total of  280.00  from holding Osisko Gold Royalties or generate 16.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.22%
ValuesDaily Returns

River and Mercantile  vs.  Osisko Gold Royalties

 Performance 
       Timeline  
River and Mercantile 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days River and Mercantile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, River is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Osisko Gold Royalties 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Royalties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Osisko Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

River and Osisko Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with River and Osisko Gold

The main advantage of trading using opposite River and Osisko Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if River position performs unexpectedly, Osisko Gold 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 Osisko Gold will offset losses from the drop in Osisko Gold's long position.
The idea behind River and Mercantile and Osisko Gold Royalties 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.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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