Correlation Between Spyre Therapeutics and Wendys

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

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

Diversification Opportunities for Spyre Therapeutics and Wendys

0.82

Correlation Coefficient

Spyre Therapeutics  Wendys

Very poor diversification

The 3 months correlation between Spyre and Wendys is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Spyre Therapeutics and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Spyre Therapeutics i.e., Spyre Therapeutics and Wendys go up and down completely randomly.

Pair Corralation between Spyre Therapeutics and Wendys

Given the investment horizon of 90 days Spyre Therapeutics is expected to under-perform the Wendys. In addition to that, Spyre Therapeutics is 4.65 times more volatile than The Wendys Co. It trades about -0.16 of its total potential returns per unit of risk. The Wendys Co is currently generating about -0.53 per unit of volatility. If you would invest  1,833  in The Wendys Co on September 24, 2024 and sell it today you would lose (168.00) from holding The Wendys Co or give up 9.17% of portfolio value over 90 days.

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

Spyre Therapeutics  vs.  The Wendys Co

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 unsteady 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.

The Wendys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Wendys Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Wendys is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Spyre Therapeutics and Wendys

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

The idea behind Spyre Therapeutics and The Wendys Co 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..