Correlation Between SilverCrest Metals and Avino Silver

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

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

Diversification Opportunities for SilverCrest Metals and Avino Silver

0.34

Correlation Coefficient

SilverCrest Metals  Avino Silver

Weak diversification

The 3 months correlation between SilverCrest and Avino is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals i.e., SilverCrest Metals and Avino Silver go up and down completely randomly.

Pair Corralation between SilverCrest Metals and Avino Silver

Given the investment horizon of 90 days SilverCrest Metals is expected to generate 1.64 times less return on investment than Avino Silver. But when comparing it to its historical volatility, SilverCrest Metals is 1.67 times less risky than Avino Silver. It trades about 0.27 of its potential returns per unit of risk. Avino Silver Gold is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Avino Silver Gold on December 30, 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	Very Weak
Accuracy	51.61%
Values	Daily Returns

SilverCrest Metals  vs.  Avino Silver Gold

SilverCrest Metals

Risk-Adjusted Performance

Solid

Over the last 90 days SilverCrest Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting essential indicators, SilverCrest Metals showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with SilverCrest Metals and Avino Silver

The main advantage of trading using opposite SilverCrest Metals and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals 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 SilverCrest Metals 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.