Correlation Between Sanofi ADR and Crinetics Pharmaceuticals

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

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

Diversification Opportunities for Sanofi ADR and Crinetics Pharmaceuticals

-0.65

Correlation Coefficient

Sanofi ADR  Crinetics Pharmaceuticals

Excellent diversification

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

Pair Corralation between Sanofi ADR and Crinetics Pharmaceuticals

Considering the 90-day investment horizon Sanofi ADR is expected to under-perform the Crinetics Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Sanofi ADR is 2.12 times less risky than Crinetics Pharmaceuticals. The stock trades about -0.23 of its potential returns per unit of risk. The Crinetics Pharmaceuticals is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sanofi ADR  vs.  Crinetics Pharmaceuticals

Sanofi ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanofi ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Crinetics Pharmaceuticals

Risk-Adjusted Performance

9 of 100

Modest

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.

Pair Trading with Sanofi ADR and Crinetics Pharmaceuticals

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

The idea behind Sanofi ADR and Crinetics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..