Correlation Between Royal Bank and Osisko Metals
Can any of the company-specific risk be diversified away by investing in both Royal Bank and Osisko 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 Royal Bank and Osisko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Bank of and Osisko Metals, you can compare the effects of market volatilities on Royal Bank and Osisko 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 Royal Bank with a short position of Osisko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Osisko Metals.
Diversification Opportunities for Royal Bank and Osisko Metals
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Royal and Osisko is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Osisko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Royal Bank 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 Royal Bank of are associated (or correlated) with Osisko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Metals has no effect on the direction of Royal Bank i.e., Royal Bank and Osisko Metals go up and down completely randomly.
Pair Corralation between Royal Bank and Osisko Metals
Assuming the 90 days trading horizon Royal Bank is expected to generate 11.54 times less return on investment than Osisko Metals. But when comparing it to its historical volatility, Royal Bank of is 21.49 times less risky than Osisko Metals. It trades about 0.17 of its potential returns per unit of risk. Osisko Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Osisko Metals on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Osisko Metals or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. Osisko Metals
Performance |
| Timeline |
| Royal Bank |
| Osisko Metals |
Royal Bank and Osisko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Osisko Metals
The main advantage of trading using opposite Royal Bank and Osisko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, Osisko 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 Osisko Metals will offset losses from the drop in Osisko Metals' long position.| Royal Bank vs. Ramp Metals | Royal Bank vs. Osisko Metals | Royal Bank vs. VIP Entertainment Technologies | Royal Bank vs. Air Canada |
| Osisko Metals vs. Kiplin Metals | Osisko Metals vs. Pure Energy Minerals | Osisko Metals vs. Noram Lithium Corp | Osisko Metals vs. Minnova 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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