Correlation Between Lyra Therapeutics and Sensei Biotherapeutics

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

By analyzing existing cross correlation between Lyra Therapeutics and Sensei Biotherapeutics, you can compare the effects of market volatilities on Lyra Therapeutics and Sensei Biotherapeutics 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 Sensei Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra Therapeutics and Sensei Biotherapeutics.

Diversification Opportunities for Lyra Therapeutics and Sensei Biotherapeutics

0.43

Correlation Coefficient

Lyra Therapeutics  Sensei Biotherapeutics

Very weak diversification

The 3 months correlation between Lyra and Sensei is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lyra Therapeutics and Sensei Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensei Biotherapeutics 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 Sensei Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensei Biotherapeutics has no effect on the direction of Lyra Therapeutics i.e., Lyra Therapeutics and Sensei Biotherapeutics go up and down completely randomly.

Pair Corralation between Lyra Therapeutics and Sensei Biotherapeutics

Given the investment horizon of 90 days Lyra Therapeutics is expected to generate 5.7 times less return on investment than Sensei Biotherapeutics. In addition to that, Lyra Therapeutics is 1.35 times more volatile than Sensei Biotherapeutics. It trades about 0.03 of its total potential returns per unit of risk. Sensei Biotherapeutics is currently generating about 0.22 per unit of volatility. If you would invest  44.00  in Sensei Biotherapeutics on October 12, 2024 and sell it today you would earn a total of  9.00  from holding Sensei Biotherapeutics or generate 20.45% return on investment over 90 days.

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

Lyra Therapeutics  vs.  Sensei Biotherapeutics

Lyra Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

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

Sensei Biotherapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sensei Biotherapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sensei Biotherapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyra Therapeutics and Sensei Biotherapeutics

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

The idea behind Lyra Therapeutics and Sensei Biotherapeutics 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.