Correlation Between Sellas Life and Spyre Therapeutics

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

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

Diversification Opportunities for Sellas Life and Spyre Therapeutics

-0.25

Correlation Coefficient

Sellas Life  Spyre Therapeutics

Very good diversification

The 3 months correlation between Sellas and Spyre is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics and Sellas Life 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 Sellas Life Sciences 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 Sellas Life i.e., Sellas Life and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Sellas Life and Spyre Therapeutics

Considering the 90-day investment horizon Sellas Life is expected to generate 18.42 times less return on investment than Spyre Therapeutics. But when comparing it to its historical volatility, Sellas Life Sciences is 2.71 times less risky than Spyre Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  975.00  in Spyre Therapeutics on September 3, 2024 and sell it today you would earn a total of  1,868  from holding Spyre Therapeutics or generate 191.59% return on investment over 90 days.

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

Sellas Life Sciences  vs.  Spyre Therapeutics

Sellas Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sellas Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Spyre Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spyre Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Spyre Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sellas Life and Spyre Therapeutics

The main advantage of trading using opposite Sellas Life and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life 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 Sellas Life Sciences 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.