Correlation Between Converge Technology and Avino Silver

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

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

Diversification Opportunities for Converge Technology and Avino Silver

0.12

Correlation Coefficient

Converge Technology  Avino Silver

Average diversification

The 3 months correlation between Converge and Avino is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions 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 Converge Technology 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 Converge Technology Solutions 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 Converge Technology i.e., Converge Technology and Avino Silver go up and down completely randomly.

Pair Corralation between Converge Technology and Avino Silver

Assuming the 90 days trading horizon Converge Technology Solutions is expected to under-perform the Avino Silver. But the stock apears to be less risky and, when comparing its historical volatility, Converge Technology Solutions is 1.02 times less risky than Avino Silver. The stock trades about -0.11 of its potential returns per unit of risk. The Avino Silver Gold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  148.00  in Avino Silver Gold on September 30, 2024 and sell it today you would lose (20.00) from holding Avino Silver Gold or give up 13.51% of portfolio value over 90 days.

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

Converge Technology Solutions  vs.  Avino Silver Gold

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Technology Solutions 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 latest abnormal performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Converge Technology and Avino Silver

The main advantage of trading using opposite Converge Technology and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology 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 Converge Technology Solutions 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .