Correlation Between Universal Stainless and Osisko Development

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

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

Diversification Opportunities for Universal Stainless and Osisko Development

-0.45

Correlation Coefficient

Universal Stainless  Osisko Development

Very good diversification

The 3 months correlation between Universal and Osisko is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Osisko Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Development Corp and Universal Stainless 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 Universal Stainless Alloy are associated (or correlated) with Osisko Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Development Corp has no effect on the direction of Universal Stainless i.e., Universal Stainless and Osisko Development go up and down completely randomly.

Pair Corralation between Universal Stainless and Osisko Development

Given the investment horizon of 90 days Universal Stainless is expected to generate 19.11 times less return on investment than Osisko Development. But when comparing it to its historical volatility, Universal Stainless Alloy is 26.59 times less risky than Osisko Development. It trades about 0.06 of its potential returns per unit of risk. Osisko Development Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  178.00  in Osisko Development Corp on September 5, 2024 and sell it today you would earn a total of  4.00  from holding Osisko Development Corp or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Universal Stainless Alloy  vs.  Osisko Development Corp

Universal Stainless Alloy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Stainless Alloy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Universal Stainless reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest weak performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Universal Stainless and Osisko Development

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

The idea behind Universal Stainless Alloy and Osisko Development 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.