Correlation Between Spyre Therapeutics and Cencora

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

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

Diversification Opportunities for Spyre Therapeutics and Cencora

0.35

Correlation Coefficient

Spyre Therapeutics  Cencora

Weak diversification

The 3 months correlation between Spyre and Cencora is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Cencora go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Cencora

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Cencora. In addition to that, Spyre Therapeutics is 3.3 times more volatile than Cencora. It trades about -0.13 of its total potential returns per unit of risk. Cencora is currently generating about -0.05 per unit of volatility. If you would invest  24,051  in Cencora on October 10, 2024 and sell it today you would lose (268.00) from holding Cencora or give up 1.11% of portfolio value over 90 days.

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

Spyre Therapeutics  vs.  Cencora

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 latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Cencora

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cencora are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Cencora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Spyre Therapeutics and Cencora

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

The idea behind Spyre Therapeutics and Cencora 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.