Correlation Between Syrah Resources and Skeena Resources

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

Diversification Opportunities for Syrah Resources and Skeena Resources

0.24

Correlation Coefficient

Syrah Resources  Skeena Resources

Modest diversification

The 3 months correlation between Syrah and Skeena is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Syrah Resources Limited and Skeena Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skeena 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 Skeena Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skeena Resources has no effect on the direction of Syrah Resources i.e., Syrah Resources and Skeena Resources go up and down completely randomly.

Pair Corralation between Syrah Resources and Skeena Resources

Assuming the 90 days horizon Syrah Resources Limited is expected to under-perform the Skeena Resources. In addition to that, Syrah Resources is 2.52 times more volatile than Skeena Resources. It trades about 0.0 of its total potential returns per unit of risk. Skeena Resources is currently generating about 0.13 per unit of volatility. If you would invest  739.00  in Skeena Resources on September 2, 2024 and sell it today you would earn a total of  188.00  from holding Skeena Resources or generate 25.44% 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.  Skeena 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 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.

Skeena Resources

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Skeena Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward-looking signals, Skeena Resources exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Syrah Resources and Skeena Resources

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

The idea behind Syrah Resources Limited and Skeena 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.