Correlation Between ATRenew and Spyre Therapeutics

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

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

Diversification Opportunities for ATRenew and Spyre Therapeutics

-0.51

Correlation Coefficient

ATRenew  Spyre Therapeutics

Excellent diversification

The 3 months correlation between ATRenew and Spyre is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and ATRenew 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 ATRenew Inc DRC 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 ATRenew i.e., ATRenew and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between ATRenew and Spyre Therapeutics

Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 1.18 times more return on investment than Spyre Therapeutics. However, ATRenew is 1.18 times more volatile than Spyre Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.04 per unit of risk. If you would invest  238.00  in ATRenew Inc DRC on September 21, 2024 and sell it today you would earn a total of  45.00  from holding ATRenew Inc DRC or generate 18.91% return on investment over 90 days.

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

ATRenew Inc DRC  vs.  Spyre Therapeutics

ATRenew Inc DRC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ATRenew and Spyre Therapeutics

The main advantage of trading using opposite ATRenew and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew 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 ATRenew Inc DRC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.