Correlation Between Surrozen and Synlogic

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

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

Diversification Opportunities for Surrozen and Synlogic

0.03

Correlation Coefficient

Surrozen  Synlogic

Significant diversification

The 3 months correlation between Surrozen and Synlogic is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Surrozen and Synlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synlogic and Surrozen 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 Surrozen are associated (or correlated) with Synlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synlogic has no effect on the direction of Surrozen i.e., Surrozen and Synlogic go up and down completely randomly.

Pair Corralation between Surrozen and Synlogic

Given the investment horizon of 90 days Surrozen is expected to generate 2.97 times more return on investment than Synlogic. However, Surrozen is 2.97 times more volatile than Synlogic. It trades about 0.05 of its potential returns per unit of risk. Synlogic is currently generating about -0.04 per unit of risk. If you would invest  1,057  in Surrozen on December 20, 2024 and sell it today you would earn a total of  75.00  from holding Surrozen or generate 7.1% return on investment over 90 days.

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

Surrozen  vs.  Synlogic

Surrozen

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Surrozen displayed solid returns over the last few months and may actually be approaching a breakup point.

Synlogic

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Surrozen and Synlogic

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

The idea behind Surrozen and Synlogic 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.