Correlation Between Vision Sensing and Syrah Resources

Can any of the company-specific risk be diversified away by investing in both Vision Sensing and Syrah 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 Vision Sensing and Syrah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vision Sensing Acquisition and Syrah Resources Limited, you can compare the effects of market volatilities on Vision Sensing and Syrah 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 Vision Sensing with a short position of Syrah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Sensing and Syrah Resources.

Diversification Opportunities for Vision Sensing and Syrah Resources

-0.43

Correlation Coefficient

Vision Sensing  Syrah Resources

Very good diversification

The 3 months correlation between Vision and Syrah is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vision Sensing Acquisition and Syrah Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrah Resources and Vision Sensing 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 Vision Sensing Acquisition are associated (or correlated) with Syrah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syrah Resources has no effect on the direction of Vision Sensing i.e., Vision Sensing and Syrah Resources go up and down completely randomly.

Pair Corralation between Vision Sensing and Syrah Resources

Given the investment horizon of 90 days Vision Sensing Acquisition is expected to generate 0.04 times more return on investment than Syrah Resources. However, Vision Sensing Acquisition is 27.59 times less risky than Syrah Resources. It trades about 0.05 of its potential returns per unit of risk. Syrah Resources Limited is currently generating about 0.0 per unit of risk. If you would invest  1,162  in Vision Sensing Acquisition on August 31, 2024 and sell it today you would earn a total of  8.00  from holding Vision Sensing Acquisition or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.43%
Values	Daily Returns

Vision Sensing Acquisition  vs.  Syrah Resources Limited

Vision Sensing Acqui

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Vision Sensing Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vision Sensing is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Vision Sensing and Syrah Resources

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

The idea behind Vision Sensing Acquisition and Syrah Resources 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.