Correlation Between Avita Medical and Spero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Avita Medical and Spero 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 Avita Medical and Spero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and Spero Therapeutics, you can compare the effects of market volatilities on Avita Medical and Spero 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 Avita Medical with a short position of Spero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and Spero Therapeutics.
Diversification Opportunities for Avita Medical and Spero Therapeutics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avita and Spero is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and Spero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spero Therapeutics and Avita Medical 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 Avita Medical are associated (or correlated) with Spero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spero Therapeutics has no effect on the direction of Avita Medical i.e., Avita Medical and Spero Therapeutics go up and down completely randomly.
Pair Corralation between Avita Medical and Spero Therapeutics
Assuming the 90 days trading horizon Avita Medical is expected to under-perform the Spero Therapeutics. In addition to that, Avita Medical is 1.7 times more volatile than Spero Therapeutics. It trades about -0.04 of its total potential returns per unit of risk. Spero Therapeutics is currently generating about 0.08 per unit of volatility. If you would invest 200.00 in Spero Therapeutics on September 6, 2025 and sell it today you would earn a total of 28.00 from holding Spero Therapeutics or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Avita Medical vs. Spero Therapeutics
Performance |
| Timeline |
| Avita Medical |
| Spero Therapeutics |
Avita Medical and Spero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and Spero Therapeutics
The main advantage of trading using opposite Avita Medical and Spero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, Spero 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 Spero Therapeutics will offset losses from the drop in Spero Therapeutics' long position.| Avita Medical vs. Infomedia | Avita Medical vs. Betr Entertainment | Avita Medical vs. Australian Unity Office | Avita Medical vs. Skycity Entertainment Group |
| Spero Therapeutics vs. Cass Information Systems | Spero Therapeutics vs. Datadog | Spero Therapeutics vs. Telephone and Data | Spero Therapeutics vs. ConAgra Foods |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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