Correlation Between Avino Silver and CVS Health

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

Diversification Opportunities for Avino Silver and CVS Health

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Avino and CVS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health 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 CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health Corp has no effect on the direction of Avino Silver i.e., Avino Silver and CVS Health go up and down completely randomly.

Pair Corralation between Avino Silver and CVS Health

Assuming the 90 days trading horizon Avino Silver Gold is expected to generate 2.3 times more return on investment than CVS Health. However, Avino Silver is 2.3 times more volatile than CVS Health Corp. It trades about 0.02 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.01 per unit of risk. If you would invest  72.00  in Avino Silver Gold on December 29, 2023 and sell it today you would earn a total of  8.00  from holding Avino Silver Gold or generate 11.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.77%
ValuesDaily Returns

Avino Silver Gold  vs.  CVS Health Corp

 Performance 
       Timeline  
Avino Silver Gold 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Avino Silver Gold are ranked lower than 7 (%) 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.
CVS Health Corp 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CVS Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Avino Silver and CVS Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Avino Silver and CVS Health

The main advantage of trading using opposite Avino Silver and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avino Silver position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.
The idea behind Avino Silver Gold and CVS Health 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.
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 the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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