Correlation Between Valneva SE and Syndax Pharmaceuticals

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

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

Diversification Opportunities for Valneva SE and Syndax Pharmaceuticals

0.6

Correlation Coefficient

Valneva SE  Syndax Pharmaceuticals

Poor diversification

The 3 months correlation between Valneva and Syndax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and Valneva SE 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 Valneva SE ADR 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 Valneva SE i.e., Valneva SE and Syndax Pharmaceuticals go up and down completely randomly.

Pair Corralation between Valneva SE and Syndax Pharmaceuticals

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Syndax Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.51 times less risky than Syndax Pharmaceuticals. The stock trades about -0.27 of its potential returns per unit of risk. The Syndax Pharmaceuticals is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,799  in Syndax Pharmaceuticals on September 12, 2024 and sell it today you would lose (305.00) from holding Syndax Pharmaceuticals or give up 16.95% of portfolio value over 90 days.

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

Valneva SE ADR  vs.  Syndax Pharmaceuticals

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE ADR 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 essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Syndax Pharmaceuticals

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Valneva SE and Syndax Pharmaceuticals

The main advantage of trading using opposite Valneva SE and Syndax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE 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 Valneva SE ADR 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.