Correlation Between Osisko Gold and Gold Road

Can any of the company-specific risk be diversified away by investing in both Osisko Gold and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Osisko Gold and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Gold and Gold Road.

Diversification Opportunities for Osisko Gold and Gold Road

0.29

Correlation Coefficient

Osisko Gold  Gold Road

Modest diversification

The 3 months correlation between Osisko and Gold is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Osisko Gold i.e., Osisko Gold and Gold Road go up and down completely randomly.

Pair Corralation between Osisko Gold and Gold Road

Allowing for the 90-day total investment horizon Osisko Gold Ro is expected to generate 0.62 times more return on investment than Gold Road. However, Osisko Gold Ro is 1.6 times less risky than Gold Road. It trades about 0.11 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.05 per unit of risk. If you would invest  1,544  in Osisko Gold Ro on March 22, 2024 and sell it today you would earn a total of  109.00  from holding Osisko Gold Ro or generate 7.06% return on investment over 90 days.

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

Osisko Gold Ro  vs.  Gold Road Resources

Osisko Gold Ro

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Osisko Gold may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Gold Road Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain primary indicators, Gold Road may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Osisko Gold and Gold Road

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

The idea behind Osisko Gold Ro and Gold Road Resources 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.