Correlation Between Lyra Therapeutics and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Stoke 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 Stoke 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 Stoke Therapeutics, you can compare the effects of market volatilities on Lyra Therapeutics and Stoke 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 Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Stoke Therapeutics.
Diversification Opportunities for Lyra Therapeutics and Stoke Therapeutics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyra and Stoke is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke 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 Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Stoke Therapeutics
Given the investment horizon of 90 days Lyra Therapeutics is expected to under-perform the Stoke Therapeutics. In addition to that, Lyra Therapeutics is 1.81 times more volatile than Stoke Therapeutics. It trades about -0.05 of its total potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.07 per unit of volatility. If you would invest 1,503 in Stoke Therapeutics on September 3, 2024 and sell it today you would lose (292.00) from holding Stoke Therapeutics or give up 19.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyra Therapeutics vs. Stoke Therapeutics
Performance |
| Timeline |
| Lyra Therapeutics |
| Stoke Therapeutics |
Lyra Therapeutics and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Stoke Therapeutics
The main advantage of trading using opposite Lyra Therapeutics and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
| Stoke Therapeutics vs. DiaMedica Therapeutics | Stoke Therapeutics vs. Lyra Therapeutics | Stoke 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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