Correlation Between Lyell Immunopharma and Bio Techne

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

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

Diversification Opportunities for Lyell Immunopharma and Bio Techne

0.22

Correlation Coefficient

Lyell Immunopharma  Bio Techne

Modest diversification

The 3 months correlation between Lyell and Bio is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lyell Immunopharma and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne Corp and Lyell Immunopharma 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 Lyell Immunopharma are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of Lyell Immunopharma i.e., Lyell Immunopharma and Bio Techne go up and down completely randomly.

Pair Corralation between Lyell Immunopharma and Bio Techne

Given the investment horizon of 90 days Lyell Immunopharma is expected to generate 2.39 times more return on investment than Bio Techne. However, Lyell Immunopharma is 2.39 times more volatile than Bio Techne Corp. It trades about 0.1 of its potential returns per unit of risk. Bio Techne Corp is currently generating about 0.09 per unit of risk. If you would invest  178.00  in Lyell Immunopharma on February 3, 2024 and sell it today you would earn a total of  55.00  from holding Lyell Immunopharma or generate 30.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Lyell Immunopharma  vs.  Bio Techne Corp

Lyell Immunopharma

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyell Immunopharma are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Lyell Immunopharma disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bio Techne Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Bio Techne demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyell Immunopharma and Bio Techne

The main advantage of trading using opposite Lyell Immunopharma and Bio Techne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyell Immunopharma position performs unexpectedly, Bio Techne 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 Bio Techne will offset losses from the drop in Bio Techne's long position.

The idea behind Lyell Immunopharma and Bio Techne Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.