Correlation Between Fate Therapeutics and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics 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 Fate Therapeutics and Lyra Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Lyra Therapeutics, you can compare the effects of market volatilities on Fate Therapeutics 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 Fate Therapeutics with a short position of Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Lyra Therapeutics.
Diversification Opportunities for Fate Therapeutics and Lyra Therapeutics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fate and Lyra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra Therapeutics and Fate 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 Fate Therapeutics 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 Fate Therapeutics i.e., Fate Therapeutics and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Lyra Therapeutics
Given the investment horizon of 90 days Fate Therapeutics is expected to generate 0.86 times more return on investment than Lyra Therapeutics. However, Fate Therapeutics is 1.16 times less risky than Lyra Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Lyra Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 543.00 in Fate Therapeutics on October 15, 2024 and sell it today you would lose (396.00) from holding Fate Therapeutics or give up 72.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Lyra Therapeutics
Performance |
| Timeline |
| Fate Therapeutics |
| Lyra Therapeutics |
Fate Therapeutics and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Lyra Therapeutics
The main advantage of trading using opposite Fate Therapeutics and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics 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.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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