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 Corp 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

0.0

Correlation Coefficient

Prospector Capital  Lyra Therapeutics

Pay attention - limited upside

The 3 months correlation between Prospector and Lyra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prospector Capital Corp 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 Corp 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 (100.00) in Prospector Capital Corp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Prospector Capital Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prospector Capital Corp  vs.  Lyra Therapeutics

Prospector Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prospector Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Prospector Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Lyra Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyra Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 Corp 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.