Correlation Between Syrah Resources and Robex Resources

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

Diversification Opportunities for Syrah Resources and Robex Resources

0.61

Correlation Coefficient

Syrah Resources  Robex Resources

Poor diversification

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

Pair Corralation between Syrah Resources and Robex Resources

Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the Robex Resources. In addition to that, Syrah Resources is 3.96 times more volatile than Robex Resources. It trades about -0.05 of its total potential returns per unit of risk. Robex Resources is currently generating about 0.33 per unit of volatility. If you would invest  153.00  in Robex Resources on October 6, 2024 and sell it today you would earn a total of  27.00  from holding Robex Resources or generate 17.65% return on investment over 90 days.

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

Syrah Resources Limited  vs.  Robex Resources

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.

Robex Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robex Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers 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 Robex Resources

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

The idea behind Syrah Resources Limited and Robex 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 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.