Correlation Between Spyre Therapeutics and Ivanhoe Electric

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

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

Diversification Opportunities for Spyre Therapeutics and Ivanhoe Electric

0.74

Correlation Coefficient

Spyre Therapeutics  Ivanhoe Electric

Poor diversification

The 3 months correlation between Spyre and Ivanhoe is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Ivanhoe Electric

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Ivanhoe Electric. But the stock apears to be less risky and, when comparing its historical volatility, Spyre Therapeutics is 1.06 times less risky than Ivanhoe Electric. The stock trades about -0.1 of its potential returns per unit of risk. The Ivanhoe Electric is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  692.00  in Ivanhoe Electric on December 19, 2024 and sell it today you would lose (72.00) from holding Ivanhoe Electric or give up 10.4% 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.  Ivanhoe Electric

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 conflicting 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.

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Spyre Therapeutics and Ivanhoe Electric

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

The idea behind Spyre Therapeutics and Ivanhoe Electric 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.