Correlation Between Avino Silver and Brookfield Business

Can any of the company-specific risk be diversified away by investing in both Avino Silver and Brookfield Business 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 Brookfield Business 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 Brookfield Business Partners, you can compare the effects of market volatilities on Avino Silver and Brookfield Business 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 Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avino Silver and Brookfield Business.

Diversification Opportunities for Avino Silver and Brookfield Business

-0.36

Correlation Coefficient

Avino Silver  Brookfield Business

Very good diversification

The 3 months correlation between Avino and Brookfield is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Brookfield Business Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business 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 Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business has no effect on the direction of Avino Silver i.e., Avino Silver and Brookfield Business go up and down completely randomly.

Pair Corralation between Avino Silver and Brookfield Business

Assuming the 90 days trading horizon Avino Silver Gold is expected to under-perform the Brookfield Business. In addition to that, Avino Silver is 1.55 times more volatile than Brookfield Business Partners. It trades about -0.2 of its total potential returns per unit of risk. Brookfield Business Partners is currently generating about -0.12 per unit of volatility. If you would invest  3,474  in Brookfield Business Partners on October 9, 2024 and sell it today you would lose (214.00) from holding Brookfield Business Partners or give up 6.16% of portfolio value over 90 days.

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

Avino Silver Gold  vs.  Brookfield Business Partners

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 very healthy primary indicators, Avino Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Brookfield Business

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Business Partners are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Brookfield Business may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Avino Silver and Brookfield Business

The main advantage of trading using opposite Avino Silver and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avino Silver position performs unexpectedly, Brookfield Business 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 Brookfield Business will offset losses from the drop in Brookfield Business' long position.

The idea behind Avino Silver Gold and Brookfield Business Partners 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.