Correlation Between HP and Avino Silver

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

Diversification Opportunities for HP and Avino Silver

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between HP and Avino is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc 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 HP 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 HP Inc 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 HP i.e., HP and Avino Silver go up and down completely randomly.

Pair Corralation between HP and Avino Silver

Considering the 90-day investment horizon HP Inc is expected to generate 0.51 times more return on investment than Avino Silver. However, HP Inc is 1.95 times less risky than Avino Silver. It trades about 0.03 of its potential returns per unit of risk. Avino Silver Gold is currently generating about 0.01 per unit of risk. If you would invest  2,259  in HP Inc on September 6, 2022 and sell it today you would earn a total of  662.00  from holding HP Inc or generate 29.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

HP Inc  vs.  Avino Silver Gold

 Performance (%) 
       Timeline  
HP Inc 
HP Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, HP may actually be approaching a critical reversion point that can send shares even higher in January 2023.

HP Price Channel

Avino Silver Gold 
Avino Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Avino Silver revealed solid returns over the last few months and may actually be approaching a breakup point.

Avino Price Channel

HP and Avino Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HP and Avino Silver

The main advantage of trading using opposite HP and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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.
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The idea behind HP Inc 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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Check out your portfolio center. 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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