Correlation Between Syrah Resources and Graphex Group

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

Diversification Opportunities for Syrah Resources and Graphex Group

0.54

Correlation Coefficient

Syrah Resources  Graphex Group

Very weak diversification

The 3 months correlation between Syrah and Graphex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and Graphex Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphex Group 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 Graphex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphex Group Limited has no effect on the direction of Syrah Resources i.e., Syrah Resources and Graphex Group go up and down completely randomly.

Pair Corralation between Syrah Resources and Graphex Group

Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the Graphex Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Syrah Resources Limited is 1.23 times less risky than Graphex Group. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Graphex Group Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Graphex Group Limited on September 3, 2024 and sell it today you would lose (2.00) from holding Graphex Group Limited or give up 9.09% of portfolio value over 90 days.

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

Syrah Resources Limited  vs.  Graphex Group Limited

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 nearly stable basic indicators, Syrah Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Graphex Group Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graphex Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Graphex Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Syrah Resources and Graphex Group

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

The idea behind Syrah Resources Limited and Graphex Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.