Correlation Between Focus Graphite and Osisko Metals

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

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

Diversification Opportunities for Focus Graphite and Osisko Metals

-0.48

Correlation Coefficient

Focus Graphite  Osisko Metals

Very good diversification

The 3 months correlation between Focus and Osisko is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Osisko Metals Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals and Focus Graphite 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 Focus Graphite are associated (or correlated) with Osisko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Metals has no effect on the direction of Focus Graphite i.e., Focus Graphite and Osisko Metals go up and down completely randomly.

Pair Corralation between Focus Graphite and Osisko Metals

Assuming the 90 days horizon Focus Graphite is expected to generate 69.59 times less return on investment than Osisko Metals. In addition to that, Focus Graphite is 1.63 times more volatile than Osisko Metals Incorporated. It trades about 0.0 of its total potential returns per unit of risk. Osisko Metals Incorporated is currently generating about 0.08 per unit of volatility. If you would invest  15.00  in Osisko Metals Incorporated on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Osisko Metals Incorporated or generate 20.0% return on investment over 90 days.

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

Focus Graphite  vs.  Osisko Metals Incorporated

Focus Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Focus Graphite is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Osisko Metals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Metals Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Osisko Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Focus Graphite and Osisko Metals

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

The idea behind Focus Graphite and Osisko Metals Incorporated 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.