Correlation Between ATyr Pharma and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both ATyr Pharma 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 ATyr Pharma and Lyra Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATyr Pharma and Lyra Therapeutics, you can compare the effects of market volatilities on ATyr Pharma 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 ATyr Pharma with a short position of Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATyr Pharma and Lyra Therapeutics.
Diversification Opportunities for ATyr Pharma and Lyra Therapeutics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATyr and Lyra is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra Therapeutics and ATyr Pharma 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 ATyr Pharma 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 ATyr Pharma i.e., ATyr Pharma and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between ATyr Pharma and Lyra Therapeutics
Given the investment horizon of 90 days ATyr Pharma is expected to under-perform the Lyra Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, ATyr Pharma is 1.01 times less risky than Lyra Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Lyra Therapeutics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 339.00 in Lyra Therapeutics on August 24, 2024 and sell it today you would lose (320.10) from holding Lyra Therapeutics or give up 94.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.81% |
| Values | Daily Returns |
ATyr Pharma vs. Lyra Therapeutics
Performance |
| Timeline |
| ATyr Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lyra Therapeutics |
ATyr Pharma and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATyr Pharma and Lyra Therapeutics
The main advantage of trading using opposite ATyr Pharma and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATyr Pharma 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.| ATyr Pharma vs. Mereo BioPharma Group | ATyr Pharma vs. Terns Pharmaceuticals | ATyr Pharma vs. PDS Biotechnology Corp | ATyr Pharma vs. Inozyme Pharma |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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