Correlation Between Syrah Resources and Graphite One
Can any of the company-specific risk be diversified away by investing in both Syrah Resources and Graphite One 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 Syrah Resources and Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Syrah Resources Limited and Graphite One, you can compare the effects of market volatilities on Syrah Resources and Graphite One 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 Syrah Resources with a short position of Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syrah Resources and Graphite One.
Diversification Opportunities for Syrah Resources and Graphite One
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Syrah and Graphite is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One and Syrah Resources 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 Syrah Resources Limited are associated (or correlated) with Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of Syrah Resources i.e., Syrah Resources and Graphite One go up and down completely randomly.
Pair Corralation between Syrah Resources and Graphite One
Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the Graphite One. In addition to that, Syrah Resources is 1.46 times more volatile than Graphite One. It trades about -0.25 of its total potential returns per unit of risk. Graphite One is currently generating about -0.1 per unit of volatility. If you would invest 62.00 in Graphite One on August 30, 2024 and sell it today you would lose (5.00) from holding Graphite One or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Syrah Resources Limited vs. Graphite One
Performance |
| Timeline |
| Syrah Resources |
| Graphite One |
Syrah Resources and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syrah Resources and Graphite One
The main advantage of trading using opposite Syrah Resources and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syrah Resources position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.| Syrah Resources vs. Ameriwest Lithium | Syrah Resources vs. Osisko Metals Incorporated | Syrah Resources vs. Volt Lithium Corp |
| Graphite One vs. Silver Hammer Mining | Graphite One vs. Reyna Silver Corp | Graphite One vs. Guanajuato Silver | Graphite One vs. Silver One Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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