Correlation Between Crinetics Pharmaceuticals and Syndax Pharmaceuticals

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

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

Diversification Opportunities for Crinetics Pharmaceuticals and Syndax Pharmaceuticals

0.03

Correlation Coefficient

Crinetics Pharmaceuticals  Syndax Pharmaceuticals

Significant diversification

The 3 months correlation between Crinetics and Syndax is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Crinetics Pharmaceuticals and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals i.e., Crinetics Pharmaceuticals and Syndax Pharmaceuticals go up and down completely randomly.

Pair Corralation between Crinetics Pharmaceuticals and Syndax Pharmaceuticals

Given the investment horizon of 90 days Crinetics Pharmaceuticals is expected to generate 0.56 times more return on investment than Syndax Pharmaceuticals. However, Crinetics Pharmaceuticals is 1.79 times less risky than Syndax Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Syndax Pharmaceuticals is currently generating about -0.06 per unit of risk. If you would invest  5,123  in Crinetics Pharmaceuticals on September 12, 2024 and sell it today you would earn a total of  892.00  from holding Crinetics Pharmaceuticals or generate 17.41% return on investment over 90 days.

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

Crinetics Pharmaceuticals  vs.  Syndax Pharmaceuticals

Crinetics Pharmaceuticals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crinetics Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Crinetics Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Crinetics Pharmaceuticals and Syndax Pharmaceuticals

The main advantage of trading using opposite Crinetics Pharmaceuticals and Syndax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.