Correlation Between Spyre Therapeutics and AKITA Drilling

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

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

Diversification Opportunities for Spyre Therapeutics and AKITA Drilling

0.27

Correlation Coefficient

Spyre Therapeutics  AKITA Drilling

Modest diversification

The 3 months correlation between Spyre and AKITA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Spyre 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 Spyre Therapeutics are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and AKITA Drilling go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and AKITA Drilling

Given the investment horizon of 90 days Spyre Therapeutics is expected to generate 5.42 times more return on investment than AKITA Drilling. However, Spyre Therapeutics is 5.42 times more volatile than AKITA Drilling. It trades about 0.04 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.0 per unit of risk. If you would invest  1,288  in Spyre Therapeutics on October 14, 2024 and sell it today you would earn a total of  958.00  from holding Spyre Therapeutics or generate 74.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Spyre Therapeutics  vs.  AKITA Drilling

Spyre Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spyre Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AKITA Drilling

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AKITA Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Spyre Therapeutics and AKITA Drilling

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

The idea behind Spyre Therapeutics and AKITA Drilling 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.