Correlation Between Spero Therapeutics and ATyr Pharma
Can any of the company-specific risk be diversified away by investing in both Spero Therapeutics and ATyr Pharma 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 Spero Therapeutics and ATyr Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spero Therapeutics and ATyr Pharma, you can compare the effects of market volatilities on Spero Therapeutics and ATyr Pharma 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 Spero Therapeutics with a short position of ATyr Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spero Therapeutics and ATyr Pharma.
Diversification Opportunities for Spero Therapeutics and ATyr Pharma
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Spero and ATyr is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spero Therapeutics and ATyr Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATyr Pharma and Spero 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 Spero Therapeutics are associated (or correlated) with ATyr Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATyr Pharma has no effect on the direction of Spero Therapeutics i.e., Spero Therapeutics and ATyr Pharma go up and down completely randomly.
Pair Corralation between Spero Therapeutics and ATyr Pharma
Given the investment horizon of 90 days Spero Therapeutics is expected to generate 0.33 times more return on investment than ATyr Pharma. However, Spero Therapeutics is 3.01 times less risky than ATyr Pharma. It trades about 0.03 of its potential returns per unit of risk. ATyr Pharma is currently generating about -0.03 per unit of risk. If you would invest 103.00 in Spero Therapeutics on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Spero Therapeutics or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.2% |
| Values | Daily Returns |
Spero Therapeutics vs. ATyr Pharma
Performance |
| Timeline |
| Spero Therapeutics |
| ATyr Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Spero Therapeutics and ATyr Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spero Therapeutics and ATyr Pharma
The main advantage of trading using opposite Spero Therapeutics and ATyr Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spero Therapeutics position performs unexpectedly, ATyr Pharma 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 ATyr Pharma will offset losses from the drop in ATyr Pharma's long position.| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX Therapeutics |
| ATyr Pharma vs. Mereo BioPharma Group | ATyr Pharma vs. Terns Pharmaceuticals | ATyr Pharma vs. PDS Biotechnology Corp | ATyr Pharma vs. Inozyme 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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