Correlation Between Avino Silver and Laurentian Bank

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

Diversification Opportunities for Avino Silver and Laurentian Bank

-0.17

Correlation Coefficient

Avino Silver  Laurentian Bank

Good diversification

The 3 months correlation between Avino and Laurentian is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank 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 Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Avino Silver i.e., Avino Silver and Laurentian Bank go up and down completely randomly.

Pair Corralation between Avino Silver and Laurentian Bank

Assuming the 90 days trading horizon Avino Silver Gold is expected to generate 1.99 times more return on investment than Laurentian Bank. However, Avino Silver is 1.99 times more volatile than Laurentian Bank. It trades about 0.05 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.02 per unit of risk. If you would invest  93.00  in Avino Silver Gold on September 14, 2024 and sell it today you would earn a total of  68.00  from holding Avino Silver Gold or generate 73.12% return on investment over 90 days.

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

Avino Silver Gold  vs.  Laurentian Bank

Avino Silver Gold

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Laurentian Bank

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Laurentian Bank are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Laurentian Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avino Silver and Laurentian Bank

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

The idea behind Avino Silver Gold and Laurentian Bank 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.