Correlation Between U Power and Spyre Therapeutics

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

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

Diversification Opportunities for U Power and Spyre Therapeutics

0.54

Correlation Coefficient

U Power  Spyre Therapeutics

Very weak diversification

The 3 months correlation between UCAR and Spyre is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and U Power 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 U Power Limited are associated (or correlated) with Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of U Power i.e., U Power and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between U Power and Spyre Therapeutics

Given the investment horizon of 90 days U Power Limited is expected to under-perform the Spyre Therapeutics. In addition to that, U Power is 2.35 times more volatile than Spyre Therapeutics. It trades about -0.14 of its total potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.1 per unit of volatility. If you would invest  2,313  in Spyre Therapeutics on December 19, 2024 and sell it today you would lose (522.00) from holding Spyre Therapeutics or give up 22.57% of portfolio value over 90 days.

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

U Power Limited  vs.  Spyre Therapeutics

U Power Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days U Power Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 unfluctuating 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.

Pair Trading with U Power and Spyre Therapeutics

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

The idea behind U Power Limited and Spyre Therapeutics 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.