Correlation Between Syndax Pharmaceuticals and Cogent Biosciences

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

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

Diversification Opportunities for Syndax Pharmaceuticals and Cogent Biosciences

-0.57

Correlation Coefficient

Syndax Pharmaceuticals  Cogent Biosciences

Excellent diversification

The 3 months correlation between Syndax and Cogent is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Syndax Pharmaceuticals and Cogent Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Biosciences 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 Cogent Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Biosciences has no effect on the direction of Syndax Pharmaceuticals i.e., Syndax Pharmaceuticals and Cogent Biosciences go up and down completely randomly.

Pair Corralation between Syndax Pharmaceuticals and Cogent Biosciences

Given the investment horizon of 90 days Syndax Pharmaceuticals is expected to generate 2.07 times less return on investment than Cogent Biosciences. But when comparing it to its historical volatility, Syndax Pharmaceuticals is 2.16 times less risky than Cogent Biosciences. It trades about 0.05 of its potential returns per unit of risk. Cogent Biosciences is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  981.00  in Cogent Biosciences on July 23, 2024 and sell it today you would earn a total of  209.00  from holding Cogent Biosciences or generate 21.3% return on investment over 90 days.

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

Syndax Pharmaceuticals  vs.  Cogent Biosciences

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 uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Cogent Biosciences

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cogent Biosciences are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Cogent Biosciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Syndax Pharmaceuticals and Cogent Biosciences

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

The idea behind Syndax Pharmaceuticals and Cogent Biosciences 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.