Correlation Between Spyre Therapeutics and Bausch Lomb

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

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

Diversification Opportunities for Spyre Therapeutics and Bausch Lomb

0.8

Correlation Coefficient

Spyre Therapeutics  Bausch Lomb

Very poor diversification

The 3 months correlation between Spyre and Bausch is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp 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 Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Bausch Lomb go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Bausch Lomb

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Bausch Lomb. In addition to that, Spyre Therapeutics is 2.09 times more volatile than Bausch Lomb Corp. It trades about -0.09 of its total potential returns per unit of risk. Bausch Lomb Corp is currently generating about -0.15 per unit of volatility. If you would invest  1,779  in Bausch Lomb Corp on December 28, 2024 and sell it today you would lose (279.00) from holding Bausch Lomb Corp or give up 15.68% of portfolio value over 90 days.

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

Spyre Therapeutics  vs.  Bausch Lomb Corp

Spyre Therapeutics

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Bausch Lomb Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bausch Lomb Corp 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 fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Spyre Therapeutics and Bausch Lomb

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

The idea behind Spyre Therapeutics and Bausch Lomb Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.