Correlation Between Avino Silver and FP Newspapers

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

Diversification Opportunities for Avino Silver and FP Newspapers

-0.43

Correlation Coefficient

Avino Silver  FP Newspapers

Very good diversification

The 3 months correlation between Avino and FP Newspapers is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and FP Newspapers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FP Newspapers 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 FP Newspapers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FP Newspapers has no effect on the direction of Avino Silver i.e., Avino Silver and FP Newspapers go up and down completely randomly.

Pair Corralation between Avino Silver and FP Newspapers

Assuming the 90 days trading horizon Avino Silver Gold is expected to generate 1.68 times more return on investment than FP Newspapers. However, Avino Silver is 1.68 times more volatile than FP Newspapers. It trades about 0.09 of its potential returns per unit of risk. FP Newspapers is currently generating about -0.04 per unit of risk. If you would invest  68.00  in Avino Silver Gold on September 4, 2024 and sell it today you would earn a total of  79.00  from holding Avino Silver Gold or generate 116.18% return on investment over 90 days.

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

Avino Silver Gold  vs.  FP Newspapers

Avino Silver Gold

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

FP Newspapers

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Avino Silver and FP Newspapers

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

The idea behind Avino Silver Gold and FP Newspapers 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.