Correlation Between Ford and Avino Silver
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Avino Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Avino Silver Gold, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Avino Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Avino Silver.
Diversification Opportunities for Ford and Avino Silver
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Avino is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and Avino Silver go up and down completely randomly.
Pair Corralation between Ford and Avino Silver
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Avino Silver. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.46 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Avino Silver Gold on January 5, 2025 and sell it today you would earn a total of 11.00 from holding Avino Silver Gold or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Ford Motor vs. Avino Silver Gold
Performance |
| Timeline |
| Ford Motor |
| Avino Silver Gold |
Ford and Avino Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Avino Silver
The main advantage of trading using opposite Ford and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and Avino Silver Gold 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.| Avino Silver vs. Hecla Mining | Avino Silver vs. McEwen Mining | Avino Silver vs. Metalla Royalty Streaming | Avino Silver vs. Endeavour Silver Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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