Correlation Between Avino Silver and Avaron Mining
Can any of the company-specific risk be diversified away by investing in both Avino Silver and Avaron Mining 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 Avino Silver and Avaron Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avino Silver Gold and Avaron Mining Corp, you can compare the effects of market volatilities on Avino Silver and Avaron Mining 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 Avino Silver with a short position of Avaron Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avino Silver and Avaron Mining.
Diversification Opportunities for Avino Silver and Avaron Mining
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avino and Avaron is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Avaron Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avaron Mining Corp and Avino Silver 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 Avino Silver Gold are associated (or correlated) with Avaron Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avaron Mining Corp has no effect on the direction of Avino Silver i.e., Avino Silver and Avaron Mining go up and down completely randomly.
Pair Corralation between Avino Silver and Avaron Mining
Assuming the 90 days trading horizon Avino Silver is expected to generate 1.38 times less return on investment than Avaron Mining. But when comparing it to its historical volatility, Avino Silver Gold is 3.06 times less risky than Avaron Mining. It trades about 0.09 of its potential returns per unit of risk. Avaron Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Avaron Mining Corp on August 28, 2024 and sell it today you would lose (2.50) from holding Avaron Mining Corp or give up 31.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avino Silver Gold vs. Avaron Mining Corp
Performance |
| Timeline |
| Avino Silver Gold |
| Avaron Mining Corp |
Avino Silver and Avaron Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avino Silver and Avaron Mining
The main advantage of trading using opposite Avino Silver and Avaron Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avino Silver position performs unexpectedly, Avaron Mining 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 Avaron Mining will offset losses from the drop in Avaron Mining's long position.| Avino Silver vs. First Majestic Silver | Avino Silver vs. Ivanhoe Energy | Avino Silver vs. Orezone Gold Corp | Avino Silver vs. Faraday Copper Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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