Correlation Between Weibo Corp and Spyre Therapeutics

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

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

Diversification Opportunities for Weibo Corp and Spyre Therapeutics

-0.45

Correlation Coefficient

Weibo Corp  Spyre Therapeutics

Very good diversification

The 3 months correlation between Weibo and Spyre is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Weibo Corp and Spyre Therapeutics

Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the Spyre Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 5.19 times less risky than Spyre Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Spyre Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,225  in Spyre Therapeutics on October 24, 2024 and sell it today you would earn a total of  965.50  from holding Spyre Therapeutics or generate 78.82% return on investment over 90 days.

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

Weibo Corp  vs.  Spyre Therapeutics

Weibo Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Weibo Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Weibo Corp and Spyre Therapeutics

The main advantage of trading using opposite Weibo Corp and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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 Weibo Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.