Correlation Between Syrah Resources and CEMATRIX

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

Diversification Opportunities for Syrah Resources and CEMATRIX

0.39

Correlation Coefficient

Syrah Resources  CEMATRIX

Weak diversification

The 3 months correlation between Syrah and CEMATRIX is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX 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 CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Syrah Resources i.e., Syrah Resources and CEMATRIX go up and down completely randomly.

Pair Corralation between Syrah Resources and CEMATRIX

Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the CEMATRIX. In addition to that, Syrah Resources is 2.59 times more volatile than CEMATRIX. It trades about -0.04 of its total potential returns per unit of risk. CEMATRIX is currently generating about 0.02 per unit of volatility. If you would invest  18.00  in CEMATRIX on October 5, 2024 and sell it today you would earn a total of  0.00  from holding CEMATRIX or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Syrah Resources Limited  vs.  CEMATRIX

Syrah Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Syrah Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CEMATRIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEMATRIX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CEMATRIX is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Syrah Resources and CEMATRIX

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

The idea behind Syrah Resources Limited and CEMATRIX 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.