Correlation Between Lyra Therapeutics and Viatris
Can any of the company-specific risk be diversified away by investing in both Lyra Therapeutics and Viatris 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 Viatris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyra Therapeutics and Viatris, you can compare the effects of market volatilities on Lyra Therapeutics and Viatris 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 Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Viatris.
Diversification Opportunities for Lyra Therapeutics and Viatris
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyra and Viatris is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris 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 Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Viatris go up and down completely randomly.
Pair Corralation between Lyra Therapeutics and Viatris
Given the investment horizon of 90 days Lyra Therapeutics is expected to under-perform the Viatris. In addition to that, Lyra Therapeutics is 3.51 times more volatile than Viatris. It trades about -0.09 of its total potential returns per unit of risk. Viatris is currently generating about -0.17 per unit of volatility. If you would invest 1,308 in Viatris on September 27, 2024 and sell it today you would lose (68.00) from holding Viatris or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyra Therapeutics vs. Viatris
Performance |
| Timeline |
| Lyra Therapeutics |
| Viatris |
Lyra Therapeutics and Viatris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyra Therapeutics and Viatris
The main advantage of trading using opposite Lyra Therapeutics and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyra Therapeutics position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.| Lyra Therapeutics vs. Fate Therapeutics | Lyra Therapeutics vs. Caribou Biosciences | Lyra Therapeutics vs. Karyopharm Therapeutics | Lyra Therapeutics vs. Hookipa Pharma |
| Viatris vs. Oric Pharmaceuticals | Viatris vs. Lyra Therapeutics | Viatris vs. Inhibrx | Viatris vs. ESSA Pharma |
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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