Correlation Between Focus Graphite and Syrah Resources
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Syrah 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 Focus Graphite and Syrah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Syrah Resources Limited, you can compare the effects of market volatilities on Focus Graphite and Syrah 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 Focus Graphite with a short position of Syrah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Syrah Resources.
Diversification Opportunities for Focus Graphite and Syrah Resources
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Syrah is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Syrah Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrah Resources and Focus Graphite 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 Focus Graphite are associated (or correlated) with Syrah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syrah Resources has no effect on the direction of Focus Graphite i.e., Focus Graphite and Syrah Resources go up and down completely randomly.
Pair Corralation between Focus Graphite and Syrah Resources
Assuming the 90 days horizon Focus Graphite is expected to generate 2.34 times more return on investment than Syrah Resources. However, Focus Graphite is 2.34 times more volatile than Syrah Resources Limited. It trades about 0.05 of its potential returns per unit of risk. Syrah Resources Limited is currently generating about -0.25 per unit of risk. If you would invest 6.00 in Focus Graphite on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Focus Graphite or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. Syrah Resources Limited
Performance |
| Timeline |
| Focus Graphite |
| Syrah Resources |
Focus Graphite and Syrah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Syrah Resources
The main advantage of trading using opposite Focus Graphite and Syrah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Syrah 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 Syrah Resources will offset losses from the drop in Syrah Resources' long position.| Focus Graphite vs. Silver Hammer Mining | Focus Graphite vs. Reyna Silver Corp | Focus Graphite vs. Guanajuato Silver | Focus Graphite vs. Silver One Resources |
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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 the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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