Correlation Between Spyre Therapeutics and CVW CleanTech

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

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

Diversification Opportunities for Spyre Therapeutics and CVW CleanTech

-0.27

Correlation Coefficient

Spyre Therapeutics  CVW CleanTech

Very good diversification

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

Pair Corralation between Spyre Therapeutics and CVW CleanTech

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the CVW CleanTech. In addition to that, Spyre Therapeutics is 1.28 times more volatile than CVW CleanTech. It trades about -0.24 of its total potential returns per unit of risk. CVW CleanTech is currently generating about 0.05 per unit of volatility. If you would invest  59.00  in CVW CleanTech on October 7, 2024 and sell it today you would earn a total of  3.00  from holding CVW CleanTech or generate 5.08% return on investment over 90 days.

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

Spyre Therapeutics  vs.  CVW CleanTech

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.

CVW CleanTech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CleanTech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, CVW CleanTech 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 CVW CleanTech

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

The idea behind Spyre Therapeutics and CVW CleanTech 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.