Correlation Between Lyra TherapeuticsInc and Tonix Pharmaceuticals

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

By analyzing existing cross correlation between Lyra TherapeuticsInc and Tonix Pharmaceuticals Holding, you can compare the effects of market volatilities on Lyra TherapeuticsInc and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyra TherapeuticsInc and Tonix Pharmaceuticals.

Diversification Opportunities for Lyra TherapeuticsInc and Tonix Pharmaceuticals

0.46

Correlation Coefficient

Lyra TherapeuticsInc  Tonix Pharmaceuticals

Very weak diversification

The 3 months correlation between Lyra and Tonix is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lyra TherapeuticsInc and Tonix Pharmaceuticals Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonix Pharmaceuticals 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 Tonix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonix Pharmaceuticals has no effect on the direction of Lyra TherapeuticsInc i.e., Lyra TherapeuticsInc and Tonix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Lyra TherapeuticsInc and Tonix Pharmaceuticals

Given the investment horizon of 90 days Lyra TherapeuticsInc is expected to under-perform the Tonix Pharmaceuticals. In addition to that, Lyra TherapeuticsInc is 3.73 times more volatile than Tonix Pharmaceuticals Holding. It trades about -0.35 of its total potential returns per unit of risk. Tonix Pharmaceuticals Holding is currently generating about 0.02 per unit of volatility. If you would invest  18.00  in Tonix Pharmaceuticals Holding on February 27, 2024 and sell it today you would earn a total of  0.00  from holding Tonix Pharmaceuticals Holding or generate 0.0% return on investment over 90 days.

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

Lyra TherapeuticsInc  vs.  Tonix Pharmaceuticals Holding

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.

Tonix Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tonix Pharmaceuticals Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Lyra TherapeuticsInc and Tonix Pharmaceuticals

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

The idea behind Lyra TherapeuticsInc and Tonix Pharmaceuticals Holding 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.