Correlation Between Osisko Development and Norsemont Mining

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

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

Diversification Opportunities for Osisko Development and Norsemont Mining

-0.2

Correlation Coefficient

Osisko Development  Norsemont Mining

Good diversification

The 3 months correlation between Osisko and Norsemont is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Development Corp and Norsemont Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsemont Mining and Osisko Development 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 Development Corp are associated (or correlated) with Norsemont Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsemont Mining has no effect on the direction of Osisko Development i.e., Osisko Development and Norsemont Mining go up and down completely randomly.

Pair Corralation between Osisko Development and Norsemont Mining

Considering the 90-day investment horizon Osisko Development Corp is expected to generate 0.45 times more return on investment than Norsemont Mining. However, Osisko Development Corp is 2.2 times less risky than Norsemont Mining. It trades about 0.05 of its potential returns per unit of risk. Norsemont Mining is currently generating about -0.05 per unit of risk. If you would invest  199.00  in Osisko Development Corp on June 23, 2024 and sell it today you would earn a total of  18.00  from holding Osisko Development Corp or generate 9.05% return on investment over 90 days.

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

Osisko Development Corp  vs.  Norsemont Mining

Osisko Development Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Development Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Osisko Development showed solid returns over the last few months and may actually be approaching a breakup point.

Norsemont Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norsemont Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Osisko Development and Norsemont Mining

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

The idea behind Osisko Development Corp and Norsemont Mining 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.