Correlation Between C4 Therapeutics and Lyell Immunopharma
Can any of the company-specific risk be diversified away by investing in both C4 Therapeutics and Lyell Immunopharma 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 C4 Therapeutics and Lyell Immunopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C4 Therapeutics and Lyell Immunopharma, you can compare the effects of market volatilities on C4 Therapeutics and Lyell Immunopharma 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 C4 Therapeutics with a short position of Lyell Immunopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of C4 Therapeutics and Lyell Immunopharma.
Diversification Opportunities for C4 Therapeutics and Lyell Immunopharma
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CCCC and Lyell is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding C4 Therapeutics and Lyell Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyell Immunopharma and C4 Therapeutics 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 C4 Therapeutics are associated (or correlated) with Lyell Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyell Immunopharma has no effect on the direction of C4 Therapeutics i.e., C4 Therapeutics and Lyell Immunopharma go up and down completely randomly.
Pair Corralation between C4 Therapeutics and Lyell Immunopharma
Given the investment horizon of 90 days C4 Therapeutics is expected to under-perform the Lyell Immunopharma. But the stock apears to be less risky and, when comparing its historical volatility, C4 Therapeutics is 1.75 times less risky than Lyell Immunopharma. The stock trades about -0.26 of its potential returns per unit of risk. The Lyell Immunopharma is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Lyell Immunopharma on August 25, 2024 and sell it today you would lose (14.00) from holding Lyell Immunopharma or give up 12.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
C4 Therapeutics vs. Lyell Immunopharma
Performance |
| Timeline |
| C4 Therapeutics |
| Lyell Immunopharma |
C4 Therapeutics and Lyell Immunopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C4 Therapeutics and Lyell Immunopharma
The main advantage of trading using opposite C4 Therapeutics and Lyell Immunopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C4 Therapeutics position performs unexpectedly, Lyell Immunopharma 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 Lyell Immunopharma will offset losses from the drop in Lyell Immunopharma's long position.| C4 Therapeutics vs. Eliem Therapeutics | C4 Therapeutics vs. HCW Biologics | C4 Therapeutics vs. RenovoRx | C4 Therapeutics vs. Scpharmaceuticals |
| Lyell Immunopharma vs. Eliem Therapeutics | Lyell Immunopharma vs. HCW Biologics | Lyell Immunopharma vs. RenovoRx | Lyell Immunopharma vs. Scpharmaceuticals |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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