Correlation Between Lyra Therapeutics and Ultragenyx
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Ultragenyx 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 Ultragenyx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyra Therapeutics and Ultragenyx, you can compare the effects of market volatilities on Lyra Therapeutics and Ultragenyx 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 Ultragenyx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Ultragenyx.
Diversification Opportunities for Lyra Therapeutics and Ultragenyx
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyra and Ultragenyx is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Ultragenyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultragenyx 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 Ultragenyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultragenyx has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Ultragenyx go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Ultragenyx
Given the investment horizon of 90 days Lyra Therapeutics is expected to under-perform the Ultragenyx. In addition to that, Lyra Therapeutics is 2.13 times more volatile than Ultragenyx. It trades about -0.03 of its total potential returns per unit of risk. Ultragenyx is currently generating about 0.02 per unit of volatility. If you would invest 4,493 in Ultragenyx on September 3, 2024 and sell it today you would earn a total of 270.00 from holding Ultragenyx or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyra Therapeutics vs. Ultragenyx
Performance |
| Timeline |
| Lyra Therapeutics |
| Ultragenyx |
Lyra Therapeutics and Ultragenyx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Ultragenyx
The main advantage of trading using opposite Lyra Therapeutics and Ultragenyx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Ultragenyx 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 Ultragenyx will offset losses from the drop in Ultragenyx's long position.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
| Ultragenyx vs. DiaMedica Therapeutics | Ultragenyx vs. Lyra Therapeutics | Ultragenyx 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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