Correlation Between Harmony Biosciences and Syndax Pharmaceuticals

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

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

Diversification Opportunities for Harmony Biosciences and Syndax Pharmaceuticals

0.23

Correlation Coefficient

Harmony Biosciences  Syndax Pharmaceuticals

Modest diversification

The 3 months correlation between Harmony and Syndax is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Biosciences Holdings and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and Harmony Biosciences 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 Harmony Biosciences Holdings 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 Harmony Biosciences i.e., Harmony Biosciences and Syndax Pharmaceuticals go up and down completely randomly.

Pair Corralation between Harmony Biosciences and Syndax Pharmaceuticals

Given the investment horizon of 90 days Harmony Biosciences is expected to generate 17.12 times less return on investment than Syndax Pharmaceuticals. But when comparing it to its historical volatility, Harmony Biosciences Holdings is 1.08 times less risky than Syndax Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Syndax Pharmaceuticals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,252  in Syndax Pharmaceuticals on December 29, 2024 and sell it today you would earn a total of  104.00  from holding Syndax Pharmaceuticals or generate 8.31% return on investment over 90 days.

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

Harmony Biosciences Holdings  vs.  Syndax Pharmaceuticals

Harmony Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harmony Biosciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Harmony Biosciences is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Syndax Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Syndax Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Syndax Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Harmony Biosciences and Syndax Pharmaceuticals

The main advantage of trading using opposite Harmony Biosciences and Syndax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Biosciences 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 Harmony Biosciences Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.