Correlation Between Gold Royalty and Avino Silver

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

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

Diversification Opportunities for Gold Royalty and Avino Silver

0.87

Correlation Coefficient

Gold Royalty  Avino Silver

Very poor diversification

The 3 months correlation between Gold and Avino is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Gold Royalty 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 Gold Royalty 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 Gold Royalty 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 Gold Royalty i.e., Gold Royalty and Avino Silver go up and down completely randomly.

Pair Corralation between Gold Royalty and Avino Silver

Given the investment horizon of 90 days Gold Royalty Corp is expected to under-perform the Avino Silver. But the stock apears to be less risky and, when comparing its historical volatility, Gold Royalty Corp is 1.78 times less risky than Avino Silver. The stock trades about -0.02 of its potential returns per unit of risk. The Avino Silver Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Avino Silver Gold on September 17, 2024 and sell it today you would earn a total of  3.00  from holding Avino Silver Gold or generate 2.91% return on investment over 90 days.

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

Gold Royalty Corp  vs.  Avino Silver Gold

Gold Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Avino Silver Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Avino Silver may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gold Royalty and Avino Silver

The main advantage of trading using opposite Gold Royalty and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Royalty 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 Gold Royalty 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.