Correlation Between Syrah Resources and Strategic Resources

Can any of the company-specific risk be diversified away by investing in both Syrah Resources and Strategic 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 Syrah Resources and Strategic Resources 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 Strategic Resources, you can compare the effects of market volatilities on Syrah Resources and Strategic 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 Syrah Resources with a short position of Strategic Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syrah Resources and Strategic Resources.

Diversification Opportunities for Syrah Resources and Strategic Resources

-0.61

Correlation Coefficient

Syrah Resources  Strategic Resources

Excellent diversification

The 3 months correlation between Syrah and Strategic is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and Strategic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Resources 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 Strategic Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Resources has no effect on the direction of Syrah Resources i.e., Syrah Resources and Strategic Resources go up and down completely randomly.

Pair Corralation between Syrah Resources and Strategic Resources

Assuming the 90 days horizon Syrah Resources Limited is expected to generate 8.13 times more return on investment than Strategic Resources. However, Syrah Resources is 8.13 times more volatile than Strategic Resources. It trades about 0.17 of its potential returns per unit of risk. Strategic Resources is currently generating about -0.12 per unit of risk. If you would invest  7.47  in Syrah Resources Limited on December 30, 2024 and sell it today you would earn a total of  10.53  from holding Syrah Resources Limited or generate 140.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Syrah Resources Limited  vs.  Strategic Resources

Syrah Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Syrah Resources Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Syrah Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Strategic Resources

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Syrah Resources and Strategic Resources

The main advantage of trading using opposite Syrah Resources and Strategic Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syrah Resources position performs unexpectedly, Strategic 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 Strategic Resources will offset losses from the drop in Strategic Resources' long position.

The idea behind Syrah Resources Limited and Strategic Resources 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.