Correlation Between IA Financial and Avino Silver

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

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

Diversification Opportunities for IA Financial and Avino Silver

-0.75

Correlation Coefficient

IA Financial  Avino Silver

Pay attention - limited upside

The 3 months correlation between IAG and Avino is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial 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 IA Financial 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 iA Financial 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 IA Financial i.e., IA Financial and Avino Silver go up and down completely randomly.

Pair Corralation between IA Financial and Avino Silver

Assuming the 90 days trading horizon IA Financial is expected to generate 1.38 times less return on investment than Avino Silver. But when comparing it to its historical volatility, iA Financial is 2.77 times less risky than Avino Silver. It trades about 0.08 of its potential returns per unit of risk. Avino Silver Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  104.00  in Avino Silver Gold on October 23, 2024 and sell it today you would earn a total of  54.00  from holding Avino Silver Gold or generate 51.92% return on investment over 90 days.

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

iA Financial  vs.  Avino Silver Gold

iA Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iA Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IA Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

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 unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with IA Financial and Avino Silver

The main advantage of trading using opposite IA Financial and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial 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 iA Financial 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.