Correlation Between Spyre Therapeutics and UNITEDHEALTH

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

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

Diversification Opportunities for Spyre Therapeutics and UNITEDHEALTH

-0.02

Correlation Coefficient

Spyre Therapeutics  UNITEDHEALTH

Good diversification

The 3 months correlation between Spyre and UNITEDHEALTH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC 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 UNITEDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITEDHEALTH GROUP INC has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and UNITEDHEALTH

Given the investment horizon of 90 days Spyre Therapeutics is expected to generate 16.4 times less return on investment than UNITEDHEALTH. But when comparing it to its historical volatility, Spyre Therapeutics is 6.85 times less risky than UNITEDHEALTH. It trades about 0.04 of its potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,143  in UNITEDHEALTH GROUP INC on September 26, 2024 and sell it today you would lose (527.00) from holding UNITEDHEALTH GROUP INC or give up 6.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.49%
Values	Daily Returns

Spyre Therapeutics  vs.  UNITEDHEALTH GROUP INC

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 unsteady 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.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITEDHEALTH GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spyre Therapeutics and UNITEDHEALTH

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

The idea behind Spyre Therapeutics and UNITEDHEALTH GROUP INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..