Correlation Between International Lithium and Syrah Resources
Can any of the company-specific risk be diversified away by investing in both International Lithium 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 International Lithium and Syrah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Lithium Corp and Syrah Resources Limited, you can compare the effects of market volatilities on International Lithium 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 International Lithium with a short position of Syrah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Syrah Resources.
Diversification Opportunities for International Lithium and Syrah Resources
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between International and Syrah is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Syrah Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrah Resources and International 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 International Lithium Corp 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 International Lithium i.e., International Lithium and Syrah Resources go up and down completely randomly.
Pair Corralation between International Lithium and Syrah Resources
Assuming the 90 days horizon International Lithium is expected to generate 2.06 times less return on investment than Syrah Resources. But when comparing it to its historical volatility, International Lithium Corp is 1.33 times less risky than Syrah Resources. It trades about 0.01 of its potential returns per unit of risk. Syrah Resources Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 164.00 in Syrah Resources Limited on August 30, 2024 and sell it today you would lose (148.00) from holding Syrah Resources Limited or give up 90.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. Syrah Resources Limited
Performance |
| Timeline |
| International Lithium |
| Syrah Resources |
International Lithium and Syrah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and Syrah Resources
The main advantage of trading using opposite International Lithium and Syrah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium 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.| International Lithium vs. Rockridge Resources | International Lithium vs. Ameriwest Lithium | International Lithium vs. Osisko Metals Incorporated | International Lithium vs. Volt Lithium Corp |
| Syrah Resources vs. C3 Metals | Syrah Resources vs. Saint Jean Carbon | Syrah Resources vs. Osisko Metals Incorporated | Syrah Resources vs. Volt Lithium Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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