Correlation Between Day One and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both Day One and Lyra Therapeutics 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 Day One and Lyra Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Day One Biopharmaceuticals and Lyra Therapeutics, you can compare the effects of market volatilities on Day One and Lyra Therapeutics 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 Day One with a short position of Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Day One and Lyra Therapeutics.
Diversification Opportunities for Day One and Lyra Therapeutics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Day and Lyra is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Day One Biopharmaceuticals and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra Therapeutics and Day One 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 Day One Biopharmaceuticals are associated (or correlated) with Lyra Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyra Therapeutics has no effect on the direction of Day One i.e., Day One and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between Day One and Lyra Therapeutics
Given the investment horizon of 90 days Day One Biopharmaceuticals is expected to generate 0.34 times more return on investment than Lyra Therapeutics. However, Day One Biopharmaceuticals is 2.96 times less risky than Lyra Therapeutics. It trades about -0.11 of its potential returns per unit of risk. Lyra Therapeutics is currently generating about -0.1 per unit of risk. If you would invest 1,447 in Day One Biopharmaceuticals on August 28, 2024 and sell it today you would lose (105.00) from holding Day One Biopharmaceuticals or give up 7.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Day One Biopharmaceuticals vs. Lyra Therapeutics
Performance |
| Timeline |
| Day One Biopharmaceu |
| Lyra Therapeutics |
Day One and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Day One and Lyra Therapeutics
The main advantage of trading using opposite Day One and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Day One position performs unexpectedly, Lyra Therapeutics 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 Lyra Therapeutics will offset losses from the drop in Lyra Therapeutics' long position.| Day One vs. Eliem Therapeutics | Day One vs. HCW Biologics | Day One vs. Scpharmaceuticals | Day One vs. Milestone Pharmaceuticals |
| Lyra Therapeutics vs. Eliem Therapeutics | Lyra Therapeutics vs. HCW Biologics | Lyra Therapeutics vs. Scpharmaceuticals | Lyra Therapeutics vs. Milestone Pharmaceuticals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |