Correlation Between Coda Octopus and Avino Silver

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Can any of the company-specific risk be diversified away by investing in both Coda Octopus 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 Coda Octopus and Avino Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coda Octopus Group and Avino Silver Gold, you can compare the effects of market volatilities on Coda Octopus 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 Coda Octopus with a short position of Avino Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and Avino Silver.

Diversification Opportunities for Coda Octopus and Avino Silver

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Coda and Avino is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group 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 Coda Octopus 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 Coda Octopus Group 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 Coda Octopus i.e., Coda Octopus and Avino Silver go up and down completely randomly.

Pair Corralation between Coda Octopus and Avino Silver

Given the investment horizon of 90 days Coda Octopus Group is expected to under-perform the Avino Silver. But the stock apears to be less risky and, when comparing its historical volatility, Coda Octopus Group is 1.1 times less risky than Avino Silver. The stock trades about -0.08 of its potential returns per unit of risk. The Avino Silver Gold is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Avino Silver Gold on December 30, 2023 and sell it today you would lose (10.00) from holding Avino Silver Gold or give up 13.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.52%
ValuesDaily Returns

Coda Octopus Group  vs.  Avino Silver Gold

 Performance 
       Timeline  
Coda Octopus Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Coda Octopus Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Coda Octopus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Avino Silver Gold 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Coda Octopus and Avino Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coda Octopus and Avino Silver

The main advantage of trading using opposite Coda Octopus and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus 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 Coda Octopus Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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