Correlation Between Carbon Streaming and Osisko Development

Can any of the company-specific risk be diversified away by investing in both Carbon Streaming and Osisko Development 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 Carbon Streaming and Osisko Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carbon Streaming Corp and Osisko Development Corp, you can compare the effects of market volatilities on Carbon Streaming and Osisko Development 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 Carbon Streaming with a short position of Osisko Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carbon Streaming and Osisko Development.

Diversification Opportunities for Carbon Streaming and Osisko Development

0.19

Correlation Coefficient

Carbon Streaming  Osisko Development

Average diversification

The 3 months correlation between Carbon and Osisko is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp and Osisko Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Development Corp and Carbon Streaming 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 Carbon Streaming Corp are associated (or correlated) with Osisko Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Development Corp has no effect on the direction of Carbon Streaming i.e., Carbon Streaming and Osisko Development go up and down completely randomly.

Pair Corralation between Carbon Streaming and Osisko Development

Assuming the 90 days horizon Carbon Streaming Corp is expected to generate 3.15 times more return on investment than Osisko Development. However, Carbon Streaming is 3.15 times more volatile than Osisko Development Corp. It trades about 0.1 of its potential returns per unit of risk. Osisko Development Corp is currently generating about 0.0 per unit of risk. If you would invest  52.00  in Carbon Streaming Corp on March 16, 2024 and sell it today you would earn a total of  24.00  from holding Carbon Streaming Corp or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carbon Streaming Corp  vs.  Osisko Development Corp

Carbon Streaming Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Streaming Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carbon Streaming reported solid returns over the last few months and may actually be approaching a breakup point.

Osisko Development Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osisko Development Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Osisko Development is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Carbon Streaming and Osisko Development

The main advantage of trading using opposite Carbon Streaming and Osisko Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbon Streaming position performs unexpectedly, Osisko Development 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 Development will offset losses from the drop in Osisko Development's long position.

The idea behind Carbon Streaming Corp and Osisko Development Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.