Correlation Between Chimerix and Spyre Therapeutics

Can any of the company-specific risk be diversified away by investing in both Chimerix and Spyre 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 Chimerix and Spyre Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chimerix and Spyre Therapeutics, you can compare the effects of market volatilities on Chimerix and Spyre 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 Chimerix with a short position of Spyre Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and Spyre Therapeutics.

Diversification Opportunities for Chimerix and Spyre Therapeutics

0.58

Correlation Coefficient

Chimerix  Spyre Therapeutics

Very weak diversification

The 3 months correlation between Chimerix and Spyre is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and Chimerix 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 Chimerix are associated (or correlated) with Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of Chimerix i.e., Chimerix and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Chimerix and Spyre Therapeutics

Given the investment horizon of 90 days Chimerix is expected to generate 0.81 times more return on investment than Spyre Therapeutics. However, Chimerix is 1.23 times less risky than Spyre Therapeutics. It trades about -0.12 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.13 per unit of risk. If you would invest  97.00  in Chimerix on September 1, 2024 and sell it today you would lose (9.00) from holding Chimerix or give up 9.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chimerix  vs.  Spyre Therapeutics

Chimerix

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Chimerix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Spyre Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spyre Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Spyre Therapeutics may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Chimerix and Spyre Therapeutics

The main advantage of trading using opposite Chimerix and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimerix position performs unexpectedly, Spyre 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 Spyre Therapeutics will offset losses from the drop in Spyre Therapeutics' long position.

The idea behind Chimerix and Spyre 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.