Correlation Between First Majestic and Avino Silver
Can any of the company-specific risk be diversified away by investing in both First Majestic and Avino Silver 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 First Majestic and Avino Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Avino Silver Gold, you can compare the effects of market volatilities on First Majestic and Avino Silver 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 First Majestic with a short position of Avino Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Avino Silver.
Diversification Opportunities for First Majestic and Avino Silver
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Avino is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Avino Silver Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avino Silver Gold and First Majestic 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 First Majestic Silver are associated (or correlated) with Avino Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avino Silver Gold has no effect on the direction of First Majestic i.e., First Majestic and Avino Silver go up and down completely randomly.
Pair Corralation between First Majestic and Avino Silver
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Avino Silver. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.11 times less risky than Avino Silver. The stock trades about -0.01 of its potential returns per unit of risk. The Avino Silver Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 141.00 in Avino Silver Gold on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Avino Silver Gold or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Avino Silver Gold
Performance |
| Timeline |
| First Majestic Silver |
| Avino Silver Gold |
First Majestic and Avino Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Avino Silver
The main advantage of trading using opposite First Majestic and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Avino Silver 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 Avino Silver will offset losses from the drop in Avino Silver's long position.| First Majestic vs. Canso Select Opportunities | First Majestic vs. Caribbean Utilities | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Diamond Estates Wines |
| Avino Silver vs. Metalero Mining Corp | Avino Silver vs. Canso Select Opportunities | Avino Silver vs. Rogers Communications | Avino Silver vs. Data Communications Management |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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