Correlation Between Spyre Therapeutics and Mountain Crest

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

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

Diversification Opportunities for Spyre Therapeutics and Mountain Crest

0.15

Correlation Coefficient

Spyre Therapeutics  Mountain Crest

Average diversification

The 3 months correlation between Spyre and Mountain is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui 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 Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Mountain Crest go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Mountain Crest

Given the investment horizon of 90 days Spyre Therapeutics is expected to generate 2.21 times more return on investment than Mountain Crest. However, Spyre Therapeutics is 2.21 times more volatile than Mountain Crest Acquisition. It trades about 0.09 of its potential returns per unit of risk. Mountain Crest Acquisition is currently generating about -0.08 per unit of risk. If you would invest  1,050  in Spyre Therapeutics on September 15, 2024 and sell it today you would earn a total of  1,342  from holding Spyre Therapeutics or generate 127.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.22%
Values	Daily Returns

Spyre Therapeutics  vs.  Mountain Crest Acquisition

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

Mountain Crest Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountain Crest Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Mountain Crest is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Spyre Therapeutics and Mountain Crest

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

The idea behind Spyre Therapeutics and Mountain Crest Acquisition 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 Global Correlations module to find global opportunities by holding instruments from different markets.