Correlation Between Lyra Therapeutics and Creative Medical
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Creative Medical 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 Lyra Therapeutics and Creative Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyra Therapeutics and Creative Medical Technology, you can compare the effects of market volatilities on Lyra Therapeutics and Creative Medical 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 Lyra Therapeutics with a short position of Creative Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Creative Medical.
Diversification Opportunities for Lyra Therapeutics and Creative Medical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lyra and Creative is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Creative Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Medical Tec and Lyra 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 Lyra Therapeutics are associated (or correlated) with Creative Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Medical Tec has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Creative Medical go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Creative Medical
Given the investment horizon of 90 days Lyra Therapeutics is expected to under-perform the Creative Medical. But the stock apears to be less risky and, when comparing its historical volatility, Lyra Therapeutics is 1.02 times less risky than Creative Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Creative Medical Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 446.00 in Creative Medical Technology on September 3, 2024 and sell it today you would lose (179.00) from holding Creative Medical Technology or give up 40.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyra Therapeutics vs. Creative Medical Technology
Performance |
| Timeline |
| Lyra Therapeutics |
| Creative Medical Tec |
Lyra Therapeutics and Creative Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Creative Medical
The main advantage of trading using opposite Lyra Therapeutics and Creative Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Creative Medical 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 Creative Medical will offset losses from the drop in Creative Medical's long position.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
| Creative Medical vs. DiaMedica Therapeutics | Creative Medical vs. Lyra Therapeutics | Creative Medical vs. Centessa Pharmaceuticals PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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