Correlation Between New Pacific and Avino Silver
Can any of the company-specific risk be diversified away by investing in both New Pacific 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 New Pacific and Avino Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Avino Silver Gold, you can compare the effects of market volatilities on New Pacific 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 New Pacific with a short position of Avino Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Avino Silver.
Diversification Opportunities for New Pacific and Avino Silver
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Avino is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals 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 New Pacific 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 New Pacific Metals 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 New Pacific i.e., New Pacific and Avino Silver go up and down completely randomly.
Pair Corralation between New Pacific and Avino Silver
Given the investment horizon of 90 days New Pacific Metals is expected to generate 0.8 times more return on investment than Avino Silver. However, New Pacific Metals is 1.25 times less risky than Avino Silver. It trades about -0.22 of its potential returns per unit of risk. Avino Silver Gold is currently generating about -0.21 per unit of risk. If you would invest 191.00 in New Pacific Metals on August 27, 2024 and sell it today you would lose (34.00) from holding New Pacific Metals or give up 17.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Avino Silver Gold
Performance |
| Timeline |
| New Pacific Metals |
| Avino Silver Gold |
New Pacific and Avino Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Avino Silver
The main advantage of trading using opposite New Pacific and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific 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.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
| Avino Silver vs. Hecla Mining | Avino Silver vs. McEwen Mining | Avino Silver vs. Endeavour Silver Corp | Avino Silver vs. New Pacific Metals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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