Correlation Between Lyra Therapeutics and Mirum Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Mirum Pharmaceuticals 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 Mirum Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyra Therapeutics and Mirum Pharmaceuticals, you can compare the effects of market volatilities on Lyra Therapeutics and Mirum Pharmaceuticals 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 Mirum Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Mirum Pharmaceuticals.
Diversification Opportunities for Lyra Therapeutics and Mirum Pharmaceuticals
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyra and Mirum is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Mirum Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirum Pharmaceuticals 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 Mirum Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirum Pharmaceuticals has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Mirum Pharmaceuticals go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Mirum Pharmaceuticals
Given the investment horizon of 90 days Lyra Therapeutics is expected to under-perform the Mirum Pharmaceuticals. In addition to that, Lyra Therapeutics is 2.79 times more volatile than Mirum Pharmaceuticals. It trades about -0.06 of its total potential returns per unit of risk. Mirum Pharmaceuticals is currently generating about 0.17 per unit of volatility. If you would invest 3,900 in Mirum Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of 765.00 from holding Mirum Pharmaceuticals or generate 19.62% 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. Mirum Pharmaceuticals
Performance |
| Timeline |
| Lyra Therapeutics |
| Mirum Pharmaceuticals |
Lyra Therapeutics and Mirum Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Mirum Pharmaceuticals
The main advantage of trading using opposite Lyra Therapeutics and Mirum Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Mirum Pharmaceuticals 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 Mirum Pharmaceuticals will offset losses from the drop in Mirum Pharmaceuticals' long position.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
| Mirum Pharmaceuticals vs. Immunocore Holdings | Mirum Pharmaceuticals vs. Larimar Therapeutics | Mirum Pharmaceuticals vs. Kalvista Pharmaceuticals | Mirum Pharmaceuticals vs. Lyra 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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