Correlation Between Lyra Therapeutics and Design Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Design 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 Lyra Therapeutics and Design Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyra Therapeutics and Design Therapeutics, you can compare the effects of market volatilities on Lyra Therapeutics and Design 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 Lyra Therapeutics with a short position of Design Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Design Therapeutics.
Diversification Opportunities for Lyra Therapeutics and Design Therapeutics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyra and Design is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Design Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design Therapeutics 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 Design Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design Therapeutics has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Design Therapeutics go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Design Therapeutics
Given the investment horizon of 90 days Lyra Therapeutics is expected to generate 11.99 times less return on investment than Design Therapeutics. In addition to that, Lyra Therapeutics is 1.27 times more volatile than Design Therapeutics. It trades about 0.01 of its total potential returns per unit of risk. Design Therapeutics is currently generating about 0.13 per unit of volatility. If you would invest 472.00 in Design Therapeutics on September 3, 2024 and sell it today you would earn a total of 128.00 from holding Design Therapeutics or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyra Therapeutics vs. Design Therapeutics
Performance |
| Timeline |
| Lyra Therapeutics |
| Design Therapeutics |
Lyra Therapeutics and Design Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Design Therapeutics
The main advantage of trading using opposite Lyra Therapeutics and Design Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Design 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 Design Therapeutics will offset losses from the drop in Design Therapeutics' long position.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
| Design Therapeutics vs. DiaMedica Therapeutics | Design Therapeutics vs. Lyra Therapeutics | Design Therapeutics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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