Correlation Between Highwood Asset and Avino Silver

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

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

Diversification Opportunities for Highwood Asset and Avino Silver

0.1

Correlation Coefficient

Highwood Asset  Avino Silver

Average diversification

The 3 months correlation between Highwood and Avino is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management 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 Highwood Asset 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 Highwood Asset Management 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 Highwood Asset i.e., Highwood Asset and Avino Silver go up and down completely randomly.

Pair Corralation between Highwood Asset and Avino Silver

Assuming the 90 days horizon Highwood Asset Management is expected to generate 0.58 times more return on investment than Avino Silver. However, Highwood Asset Management is 1.73 times less risky than Avino Silver. It trades about -0.18 of its potential returns per unit of risk. Avino Silver Gold is currently generating about -0.2 per unit of risk. If you would invest  610.00  in Highwood Asset Management on September 23, 2024 and sell it today you would lose (55.00) from holding Highwood Asset Management or give up 9.02% of portfolio value over 90 days.

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

Highwood Asset Management  vs.  Avino Silver Gold

Highwood Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highwood Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Highwood Asset 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 very healthy primary indicators, Avino Silver is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Highwood Asset and Avino Silver

The main advantage of trading using opposite Highwood Asset and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset 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 Highwood Asset Management 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.