Correlation Between Solid Biosciences and Synlogic

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

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

Diversification Opportunities for Solid Biosciences and Synlogic

0.76

Correlation Coefficient

Solid Biosciences  Synlogic

Poor diversification

The 3 months correlation between Solid and Synlogic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Solid Biosciences LLC and Synlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synlogic and Solid 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 Solid Biosciences LLC 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 Solid Biosciences i.e., Solid Biosciences and Synlogic go up and down completely randomly.

Pair Corralation between Solid Biosciences and Synlogic

Given the investment horizon of 90 days Solid Biosciences LLC is expected to generate 1.21 times more return on investment than Synlogic. However, Solid Biosciences is 1.21 times more volatile than Synlogic. It trades about 0.23 of its potential returns per unit of risk. Synlogic is currently generating about 0.12 per unit of risk. If you would invest  326.00  in Solid Biosciences LLC on May 28, 2025 and sell it today you would earn a total of  267.00  from holding Solid Biosciences LLC or generate 81.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Solid Biosciences LLC  vs.  Synlogic

Solid Biosciences LLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Solid Biosciences LLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Solid Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Synlogic

Risk-Adjusted Performance

Fair

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

Pair Trading with Solid Biosciences and Synlogic

The main advantage of trading using opposite Solid Biosciences and Synlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Biosciences 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 Solid Biosciences LLC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.