Correlation Between Vestis and Spyre Therapeutics

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

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

Diversification Opportunities for Vestis and Spyre Therapeutics

0.75

Correlation Coefficient

Vestis  Spyre Therapeutics

Poor diversification

The 3 months correlation between Vestis and Spyre is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vestis and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and Vestis 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 Vestis 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 Vestis i.e., Vestis and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Vestis and Spyre Therapeutics

Given the investment horizon of 90 days Vestis is expected to under-perform the Spyre Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Vestis is 1.54 times less risky than Spyre Therapeutics. The stock trades about -0.24 of its potential returns per unit of risk. The Spyre Therapeutics is currently generating about -0.1 of returns per unit of risk over similar time horizon. 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	Significant
Accuracy	100.0%
Values	Daily Returns

Vestis  vs.  Spyre Therapeutics

Vestis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vestis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 Vestis and Spyre Therapeutics

The main advantage of trading using opposite Vestis and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestis 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 Vestis 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.