Correlation Between Lyra TherapeuticsInc and Anixa Biosciences

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

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

Diversification Opportunities for Lyra TherapeuticsInc and Anixa Biosciences

0.7

Correlation Coefficient

Lyra TherapeuticsInc  Anixa Biosciences

Poor diversification

The 3 months correlation between Lyra and Anixa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lyra TherapeuticsInc and Anixa Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anixa Biosciences and Lyra TherapeuticsInc 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 Lyra TherapeuticsInc are associated (or correlated) with Anixa Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anixa Biosciences has no effect on the direction of Lyra TherapeuticsInc i.e., Lyra TherapeuticsInc and Anixa Biosciences go up and down completely randomly.

Pair Corralation between Lyra TherapeuticsInc and Anixa Biosciences

Given the investment horizon of 90 days Lyra TherapeuticsInc is expected to under-perform the Anixa Biosciences. In addition to that, Lyra TherapeuticsInc is 5.73 times more volatile than Anixa Biosciences. It trades about -0.35 of its total potential returns per unit of risk. Anixa Biosciences is currently generating about -0.28 per unit of volatility. If you would invest  302.00  in Anixa Biosciences on February 29, 2024 and sell it today you would lose (60.00) from holding Anixa Biosciences or give up 19.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Lyra TherapeuticsInc  vs.  Anixa Biosciences

Lyra TherapeuticsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lyra TherapeuticsInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Anixa Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anixa Biosciences 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 forward indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lyra TherapeuticsInc and Anixa Biosciences

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

The idea behind Lyra TherapeuticsInc and Anixa Biosciences 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.