Correlation Between Spyre Therapeutics and Teradyne

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

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

Diversification Opportunities for Spyre Therapeutics and Teradyne

-0.49

Correlation Coefficient

Spyre Therapeutics  Teradyne

Very good diversification

The 3 months correlation between Spyre and Teradyne is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne 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 Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Teradyne go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Teradyne

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Teradyne. In addition to that, Spyre Therapeutics is 1.4 times more volatile than Teradyne. It trades about -0.11 of its total potential returns per unit of risk. Teradyne is currently generating about 0.31 per unit of volatility. If you would invest  11,956  in Teradyne on October 10, 2024 and sell it today you would earn a total of  1,926  from holding Teradyne or generate 16.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Spyre Therapeutics  vs.  Teradyne

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.

Teradyne

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Teradyne may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Spyre Therapeutics and Teradyne

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

The idea behind Spyre Therapeutics and Teradyne 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.