Correlation Between Osisko Development and Carbon Streaming

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

Diversification Opportunities for Osisko Development and Carbon Streaming

0.35

Correlation Coefficient

Osisko Development  Carbon Streaming

Weak diversification

The 3 months correlation between Osisko and Carbon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Development Corp and Carbon Streaming Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Streaming Corp 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 Carbon Streaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Streaming Corp has no effect on the direction of Osisko Development i.e., Osisko Development and Carbon Streaming go up and down completely randomly.

Pair Corralation between Osisko Development and Carbon Streaming

Assuming the 90 days horizon Osisko Development Corp is expected to under-perform the Carbon Streaming. In addition to that, Osisko Development is 1.2 times more volatile than Carbon Streaming Corp. It trades about -0.25 of its total potential returns per unit of risk. Carbon Streaming Corp is currently generating about -0.14 per unit of volatility. If you would invest  37.00  in Carbon Streaming Corp on August 17, 2024 and sell it today you would lose (7.00) from holding Carbon Streaming Corp or give up 18.92% of portfolio value over 90 days.

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

Osisko Development Corp  vs.  Carbon Streaming Corp

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Osisko Development and Carbon Streaming

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

The idea behind Osisko Development Corp and Carbon Streaming 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.