Correlation Between AKITA Drilling and Spyre Therapeutics

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

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

Diversification Opportunities for AKITA Drilling and Spyre Therapeutics

0.14

Correlation Coefficient

AKITA Drilling  Spyre Therapeutics

Average diversification

The 3 months correlation between AKITA and Spyre is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between AKITA Drilling and Spyre Therapeutics

Assuming the 90 days horizon AKITA Drilling is expected to generate 0.35 times more return on investment than Spyre Therapeutics. However, AKITA Drilling is 2.84 times less risky than Spyre Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.21 per unit of risk. If you would invest  113.00  in AKITA Drilling on September 25, 2024 and sell it today you would earn a total of  2.00  from holding AKITA Drilling or generate 1.77% return on investment over 90 days.

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

AKITA Drilling  vs.  Spyre Therapeutics

AKITA Drilling

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AKITA Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 fragile 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.

Pair Trading with AKITA Drilling and Spyre Therapeutics

The main advantage of trading using opposite AKITA Drilling and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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 AKITA Drilling 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.