Correlation Between Avino Silver and Compania

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

Diversification Opportunities for Avino Silver and Compania

0.58

Correlation Coefficient

Avino Silver  Compania

Very weak diversification

The 3 months correlation between Avino and Compania is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas 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 Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of Avino Silver i.e., Avino Silver and Compania go up and down completely randomly.

Pair Corralation between Avino Silver and Compania

Considering the 90-day investment horizon Avino Silver Gold is expected to generate 2.66 times more return on investment than Compania. However, Avino Silver is 2.66 times more volatile than Compania de Minas. It trades about 0.27 of its potential returns per unit of risk. Compania de Minas is currently generating about 0.22 per unit of risk. If you would invest  86.00  in Avino Silver Gold on December 28, 2024 and sell it today you would earn a total of  103.00  from holding Avino Silver Gold or generate 119.77% return on investment over 90 days.

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

Avino Silver Gold  vs.  Compania de Minas

Avino Silver Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Compania de Minas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Minas are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Compania displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avino Silver and Compania

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

The idea behind Avino Silver Gold and Compania de Minas 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.