Correlation Between Spyre Therapeutics and Centessa Pharmaceuticals

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

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

Diversification Opportunities for Spyre Therapeutics and Centessa Pharmaceuticals

0.61

Correlation Coefficient

Spyre Therapeutics  Centessa Pharmaceuticals

Poor diversification

The 3 months correlation between Spyre and Centessa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Centessa Pharmaceuticals go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Centessa Pharmaceuticals

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Centessa Pharmaceuticals. In addition to that, Spyre Therapeutics is 1.05 times more volatile than Centessa Pharmaceuticals PLC. It trades about -0.16 of its total potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.0 per unit of volatility. If you would invest  1,716  in Centessa Pharmaceuticals PLC on December 4, 2024 and sell it today you would lose (81.00) from holding Centessa Pharmaceuticals PLC or give up 4.72% of portfolio value over 90 days.

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

Spyre Therapeutics  vs.  Centessa Pharmaceuticals PLC

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 fragile 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.

Centessa Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centessa Pharmaceuticals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Centessa Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spyre Therapeutics and Centessa Pharmaceuticals

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

The idea behind Spyre Therapeutics and Centessa Pharmaceuticals PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.