Correlation Between Bolt Biotherapeutics and Syndax Pharmaceuticals

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

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

Diversification Opportunities for Bolt Biotherapeutics and Syndax Pharmaceuticals

0.65

Correlation Coefficient

Bolt Biotherapeutics  Syndax Pharmaceuticals

Poor diversification

The 3 months correlation between Bolt and Syndax is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and Bolt Biotherapeutics 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 Bolt Biotherapeutics are associated (or correlated) with Syndax Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syndax Pharmaceuticals has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Syndax Pharmaceuticals go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Syndax Pharmaceuticals

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to generate 0.4 times more return on investment than Syndax Pharmaceuticals. However, Bolt Biotherapeutics is 2.5 times less risky than Syndax Pharmaceuticals. It trades about -0.1 of its potential returns per unit of risk. Syndax Pharmaceuticals is currently generating about -0.06 per unit of risk. If you would invest  67.00  in Bolt Biotherapeutics on September 5, 2024 and sell it today you would lose (4.00) from holding Bolt Biotherapeutics or give up 5.97% of portfolio value over 90 days.

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

Bolt Biotherapeutics  vs.  Syndax Pharmaceuticals

Bolt Biotherapeutics

Risk-Adjusted Performance

0 of 100

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 comparatively stable essential indicators, Bolt Biotherapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Syndax Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Syndax Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Bolt Biotherapeutics and Syndax Pharmaceuticals

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

The idea behind Bolt Biotherapeutics and Syndax Pharmaceuticals 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 Valuation module to check real value of public entities based on technical and fundamental data.