Correlation Between ATyr Pharma and Spero Therapeutics
Can any of the company-specific risk be diversified away by investing in both ATyr Pharma and Spero 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 Spero 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 Spero Therapeutics, you can compare the effects of market volatilities on ATyr Pharma and Spero 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 Spero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATyr Pharma and Spero Therapeutics.
Diversification Opportunities for ATyr Pharma and Spero Therapeutics
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATyr and Spero is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and Spero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spero 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 Spero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spero Therapeutics has no effect on the direction of ATyr Pharma i.e., ATyr Pharma and Spero Therapeutics go up and down completely randomly.
Pair Corralation between ATyr Pharma and Spero Therapeutics
Given the investment horizon of 90 days ATyr Pharma is expected to under-perform the Spero Therapeutics. In addition to that, ATyr Pharma is 3.01 times more volatile than Spero Therapeutics. It trades about -0.03 of its total potential returns per unit of risk. Spero Therapeutics is currently generating about 0.03 per unit of volatility. If you would invest 103.00 in Spero Therapeutics on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Spero Therapeutics or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.2% |
| Values | Daily Returns |
ATyr Pharma vs. Spero Therapeutics
Performance |
| Timeline |
| ATyr Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Spero Therapeutics |
ATyr Pharma and Spero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATyr Pharma and Spero Therapeutics
The main advantage of trading using opposite ATyr Pharma and Spero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATyr Pharma position performs unexpectedly, Spero 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 Spero Therapeutics will offset losses from the drop in Spero 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 |
| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX Therapeutics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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