Correlation Between Sigma Lithium and Avino Silver

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

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

Diversification Opportunities for Sigma Lithium and Avino Silver

-0.29

Correlation Coefficient

Sigma Lithium  Avino Silver

Very good diversification

The 3 months correlation between Sigma and Avino is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources 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 Sigma Lithium 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 Sigma Lithium Resources 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 Sigma Lithium i.e., Sigma Lithium and Avino Silver go up and down completely randomly.

Pair Corralation between Sigma Lithium and Avino Silver

Given the investment horizon of 90 days Sigma Lithium Resources is expected to under-perform the Avino Silver. In addition to that, Sigma Lithium is 1.62 times more volatile than Avino Silver Gold. It trades about 0.0 of its total potential returns per unit of risk. Avino Silver Gold is currently generating about 0.16 per unit of volatility. If you would invest  267.00  in Avino Silver Gold on May 16, 2025 and sell it today you would earn a total of  103.00  from holding Avino Silver Gold or generate 38.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Sigma Lithium Resources  vs.  Avino Silver Gold

Sigma Lithium Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days Sigma Lithium Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Sigma Lithium is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Avino Silver Gold

Risk-Adjusted Performance

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 conflicting basic indicators, Avino Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sigma Lithium and Avino Silver

The main advantage of trading using opposite Sigma Lithium and Avino Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium 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 Sigma Lithium Resources 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.