Correlation Between Anson Resources and Syrah Resources

Can any of the company-specific risk be diversified away by investing in both Anson Resources 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 Anson Resources and Syrah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anson Resources Limited and Syrah Resources Limited, you can compare the effects of market volatilities on Anson Resources 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 Anson Resources with a short position of Syrah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anson Resources and Syrah Resources.

Diversification Opportunities for Anson Resources and Syrah Resources

-0.25

Correlation Coefficient

Anson Resources  Syrah Resources

Very good diversification

The 3 months correlation between Anson and Syrah is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Anson Resources Limited and Syrah Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrah Resources and Anson 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 Anson Resources Limited 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 Anson Resources i.e., Anson Resources and Syrah Resources go up and down completely randomly.

Pair Corralation between Anson Resources and Syrah Resources

Assuming the 90 days horizon Anson Resources Limited is expected to under-perform the Syrah Resources. In addition to that, Anson Resources is 2.12 times more volatile than Syrah Resources Limited. It trades about -0.01 of its total potential returns per unit of risk. Syrah Resources Limited is currently generating about 0.12 per unit of volatility. If you would invest  12.00  in Syrah Resources Limited on December 28, 2024 and sell it today you would earn a total of  5.00  from holding Syrah Resources Limited or generate 41.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Anson Resources Limited  vs.  Syrah Resources Limited

Anson Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anson Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Syrah Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Syrah Resources Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Syrah Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anson Resources and Syrah Resources

The main advantage of trading using opposite Anson Resources and Syrah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anson Resources 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.

The idea behind Anson Resources Limited and Syrah Resources Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.