Correlation Between Avino Silver and Perpetua Resources

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

Diversification Opportunities for Avino Silver and Perpetua Resources

0.91

Correlation Coefficient

Avino Silver  Perpetua Resources

Almost no diversification

The 3 months correlation between Avino and Perpetua is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Perpetua Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetua Resources Corp 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 Perpetua Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetua Resources Corp has no effect on the direction of Avino Silver i.e., Avino Silver and Perpetua Resources go up and down completely randomly.

Pair Corralation between Avino Silver and Perpetua Resources

Assuming the 90 days trading horizon Avino Silver is expected to generate 1.93 times less return on investment than Perpetua Resources. But when comparing it to its historical volatility, Avino Silver Gold is 1.33 times less risky than Perpetua Resources. It trades about 0.25 of its potential returns per unit of risk. Perpetua Resources Corp is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  373.00  in Perpetua Resources Corp on January 24, 2024 and sell it today you would earn a total of  493.00  from holding Perpetua Resources Corp or generate 132.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.62%
Values	Daily Returns

Avino Silver Gold  vs.  Perpetua Resources Corp

Avino Silver Gold

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Perpetua Resources Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetua Resources Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Perpetua Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avino Silver and Perpetua Resources

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

The idea behind Avino Silver Gold and Perpetua Resources Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.