Correlation Between Lyell Immunopharma and Bolt Biotherapeutics

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

By analyzing existing cross correlation between Lyell Immunopharma and Bolt Biotherapeutics, you can compare the effects of market volatilities on Lyell Immunopharma and Bolt Biotherapeutics 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 Bolt Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyell Immunopharma and Bolt Biotherapeutics.

Diversification Opportunities for Lyell Immunopharma and Bolt Biotherapeutics

0.36

Correlation Coefficient

Lyell Immunopharma  Bolt Biotherapeutics

Weak diversification

The 3 months correlation between Lyell and Bolt is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lyell Immunopharma and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics 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 Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Lyell Immunopharma i.e., Lyell Immunopharma and Bolt Biotherapeutics go up and down completely randomly.

Pair Corralation between Lyell Immunopharma and Bolt Biotherapeutics

Given the investment horizon of 90 days Lyell Immunopharma is expected to generate 1.64 times more return on investment than Bolt Biotherapeutics. However, Lyell Immunopharma is 1.64 times more volatile than Bolt Biotherapeutics. It trades about -0.08 of its potential returns per unit of risk. Bolt Biotherapeutics is currently generating about -0.23 per unit of risk. If you would invest  68.00  in Lyell Immunopharma on January 6, 2025 and sell it today you would lose (22.00) from holding Lyell Immunopharma or give up 32.35% of portfolio value over 90 days.

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

Lyell Immunopharma  vs.  Bolt Biotherapeutics

Lyell Immunopharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyell Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics 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 essential indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lyell Immunopharma and Bolt Biotherapeutics

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

The idea behind Lyell Immunopharma and Bolt Biotherapeutics 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.