Correlation Between Syrah Resources and IGO
Can any of the company-specific risk be diversified away by investing in both Syrah Resources and IGO 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 IGO 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 IGO Limited, you can compare the effects of market volatilities on Syrah Resources and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syrah Resources and IGO.
Diversification Opportunities for Syrah Resources and IGO
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Syrah and IGO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Syrah Resources i.e., Syrah Resources and IGO go up and down completely randomly.
Pair Corralation between Syrah Resources and IGO
Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the IGO. In addition to that, Syrah Resources is 2.2 times more volatile than IGO Limited. It trades about -0.03 of its total potential returns per unit of risk. IGO Limited is currently generating about -0.06 per unit of volatility. If you would invest 1,937 in IGO Limited on October 20, 2024 and sell it today you would lose (1,364) from holding IGO Limited or give up 70.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Syrah Resources Limited vs. IGO Limited
Performance |
| Timeline |
| Syrah Resources |
| IGO Limited |
Syrah Resources and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syrah Resources and IGO
The main advantage of trading using opposite Syrah Resources and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syrah Resources position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Syrah Resources vs. Northern Graphite | Syrah Resources vs. Focus Graphite | Syrah Resources vs. Altura Mining Limited | Syrah Resources vs. Vulcan Minerals |
| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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