Correlation Between Lomiko Metals and Syrah Resources
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals 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 Lomiko Metals and Syrah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Syrah Resources Limited, you can compare the effects of market volatilities on Lomiko Metals 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 Lomiko Metals with a short position of Syrah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Syrah Resources.
Diversification Opportunities for Lomiko Metals and Syrah Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lomiko and Syrah is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Syrah Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrah Resources and Lomiko Metals 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 Lomiko Metals 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 Lomiko Metals i.e., Lomiko Metals and Syrah Resources go up and down completely randomly.
Pair Corralation between Lomiko Metals and Syrah Resources
Assuming the 90 days horizon Lomiko Metals is expected to generate 2.22 times less return on investment than Syrah Resources. But when comparing it to its historical volatility, Lomiko Metals is 1.29 times less risky than Syrah Resources. It trades about 0.13 of its potential returns per unit of risk. Syrah Resources Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Syrah Resources Limited on November 1, 2024 and sell it today you would earn a total of 4.00 from holding Syrah Resources Limited or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lomiko Metals vs. Syrah Resources Limited
Performance |
| Timeline |
| Lomiko Metals |
| Syrah Resources |
Lomiko Metals and Syrah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Syrah Resources
The main advantage of trading using opposite Lomiko Metals and Syrah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals 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.| Lomiko Metals vs. ZincX Resources Corp | Lomiko Metals vs. Mundoro Capital | Lomiko Metals vs. Strategic Resources | Lomiko Metals vs. Norra Metals Corp |
| Syrah Resources vs. Northern Graphite | Syrah Resources vs. Focus Graphite | Syrah Resources vs. Altura Mining Limited | Syrah Resources vs. Vulcan Minerals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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