Correlation Between Osisko Gold and AngloGold Ashanti

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

Diversification Opportunities for Osisko Gold and AngloGold Ashanti

0.89

Correlation Coefficient

Osisko Gold  AngloGold Ashanti

Very poor diversification

The 3 months correlation between Osisko and AngloGold is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Osisko Gold i.e., Osisko Gold and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Osisko Gold and AngloGold Ashanti

Allowing for the 90-day total investment horizon Osisko Gold Ro is expected to under-perform the AngloGold Ashanti. But the stock apears to be less risky and, when comparing its historical volatility, Osisko Gold Ro is 2.01 times less risky than AngloGold Ashanti. The stock trades about -0.09 of its potential returns per unit of risk. The AngloGold Ashanti plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,310  in AngloGold Ashanti plc on February 4, 2024 and sell it today you would earn a total of  4.00  from holding AngloGold Ashanti plc or generate 0.17% return on investment over 90 days.

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

Osisko Gold Ro  vs.  AngloGold Ashanti plc

Osisko Gold Ro

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 4 (%) 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 June 2024.

AngloGold Ashanti plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, AngloGold Ashanti unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osisko Gold and AngloGold Ashanti

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

The idea behind Osisko Gold Ro and AngloGold Ashanti plc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.