Correlation Between Equillium and Syndax Pharmaceuticals

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

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

Diversification Opportunities for Equillium and Syndax Pharmaceuticals

0.45

Correlation Coefficient

Equillium  Syndax Pharmaceuticals

Very weak diversification

The 3 months correlation between Equillium and Syndax is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and Equillium 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 Equillium 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 Equillium i.e., Equillium and Syndax Pharmaceuticals go up and down completely randomly.

Pair Corralation between Equillium and Syndax Pharmaceuticals

Allowing for the 90-day total investment horizon Equillium is expected to generate 2.04 times more return on investment than Syndax Pharmaceuticals. However, Equillium is 2.04 times more volatile than Syndax Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Syndax Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  71.00  in Equillium on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Equillium or generate 7.04% return on investment over 90 days.

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

Equillium  vs.  Syndax Pharmaceuticals

Equillium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equillium are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equillium reported solid returns over the last few months and may actually be approaching a breakup point.

Syndax Pharmaceuticals

Risk-Adjusted Performance

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 fairly strong fundamental indicators, Syndax Pharmaceuticals is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Equillium and Syndax Pharmaceuticals

The main advantage of trading using opposite Equillium and Syndax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium 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 Equillium 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.