Correlation Between Prospector Capital and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both Prospector Capital and Lyra 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 Prospector Capital and Lyra Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospector Capital Equity and Lyra Therapeutics, you can compare the effects of market volatilities on Prospector Capital and Lyra 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 Prospector Capital with a short position of Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospector Capital and Lyra Therapeutics.
Diversification Opportunities for Prospector Capital and Lyra Therapeutics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prospector and Lyra is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Prospector Capital Equity and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra Therapeutics and Prospector Capital 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 Prospector Capital Equity are associated (or correlated) with Lyra Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyra Therapeutics has no effect on the direction of Prospector Capital i.e., Prospector Capital and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between Prospector Capital and Lyra Therapeutics
If you would invest 10.00 in Prospector Capital Equity on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Prospector Capital Equity or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Prospector Capital Equity vs. Lyra Therapeutics
Performance |
| Timeline |
| Prospector Capital Equity |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lyra Therapeutics |
Prospector Capital and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospector Capital and Lyra Therapeutics
The main advantage of trading using opposite Prospector Capital and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospector Capital position performs unexpectedly, Lyra 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 Lyra Therapeutics will offset losses from the drop in Lyra Therapeutics' long position.The idea behind Prospector Capital Equity and Lyra Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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