Correlation Between Syndax Pharmaceuticals and Cyclo Therapeutics

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

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

Diversification Opportunities for Syndax Pharmaceuticals and Cyclo Therapeutics

-0.08

Correlation Coefficient

Syndax Pharmaceuticals  Cyclo Therapeutics

Good diversification

The 3 months correlation between Syndax and Cyclo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Syndax Pharmaceuticals and Cyclo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclo Therapeutics and Syndax 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 Syndax Pharmaceuticals are associated (or correlated) with Cyclo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclo Therapeutics has no effect on the direction of Syndax Pharmaceuticals i.e., Syndax Pharmaceuticals and Cyclo Therapeutics go up and down completely randomly.

Pair Corralation between Syndax Pharmaceuticals and Cyclo Therapeutics

Given the investment horizon of 90 days Syndax Pharmaceuticals is expected to generate 0.39 times more return on investment than Cyclo Therapeutics. However, Syndax Pharmaceuticals is 2.58 times less risky than Cyclo Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Cyclo Therapeutics is currently generating about -0.09 per unit of risk. If you would invest  1,434  in Syndax Pharmaceuticals on December 5, 2024 and sell it today you would earn a total of  4.00  from holding Syndax Pharmaceuticals or generate 0.28% return on investment over 90 days.

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

Syndax Pharmaceuticals  vs.  Cyclo Therapeutics

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

Cyclo Therapeutics

Risk-Adjusted Performance

OK

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

Pair Trading with Syndax Pharmaceuticals and Cyclo Therapeutics

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

The idea behind Syndax Pharmaceuticals and Cyclo Therapeutics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.