Correlation Between AbraSilver Resource and Avino Silver

Can any of the company-specific risk be diversified away by investing in both AbraSilver Resource 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 AbraSilver Resource and Avino Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AbraSilver Resource Corp and Avino Silver Gold, you can compare the effects of market volatilities on AbraSilver Resource 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 AbraSilver Resource with a short position of Avino Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and Avino Silver.

Diversification Opportunities for AbraSilver Resource and Avino Silver

0.89

Correlation Coefficient

AbraSilver Resource  Avino Silver

Very poor diversification

The 3 months correlation between AbraSilver and Avino is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp 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 AbraSilver Resource 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 AbraSilver Resource Corp 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 AbraSilver Resource i.e., AbraSilver Resource and Avino Silver go up and down completely randomly.

Pair Corralation between AbraSilver Resource and Avino Silver

Assuming the 90 days trading horizon AbraSilver Resource Corp is expected to generate 0.88 times more return on investment than Avino Silver. However, AbraSilver Resource Corp is 1.13 times less risky than Avino Silver. It trades about -0.02 of its potential returns per unit of risk. Avino Silver Gold is currently generating about -0.03 per unit of risk. If you would invest  269.00  in AbraSilver Resource Corp on October 6, 2024 and sell it today you would lose (21.00) from holding AbraSilver Resource Corp or give up 7.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

AbraSilver Resource Corp  vs.  Avino Silver Gold

AbraSilver Resource Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AbraSilver Resource Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AbraSilver Resource is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Avino Silver Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avino Silver Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with AbraSilver Resource and Avino Silver

The main advantage of trading using opposite AbraSilver Resource and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbraSilver Resource 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 AbraSilver Resource Corp 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.