Correlation Between SUN LIFE and Syndax Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both SUN LIFE 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 SUN LIFE and Syndax Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN LIFE FINANCIAL and Syndax Pharmaceuticals, you can compare the effects of market volatilities on SUN LIFE 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 SUN LIFE with a short position of Syndax Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN LIFE and Syndax Pharmaceuticals.
Diversification Opportunities for SUN LIFE and Syndax Pharmaceuticals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SUN and Syndax is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIFE FINANCIAL and Syndax Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syndax Pharmaceuticals and SUN LIFE 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 SUN LIFE FINANCIAL 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 SUN LIFE i.e., SUN LIFE and Syndax Pharmaceuticals go up and down completely randomly.
Pair Corralation between SUN LIFE and Syndax Pharmaceuticals
Assuming the 90 days trading horizon SUN LIFE FINANCIAL is expected to under-perform the Syndax Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, SUN LIFE FINANCIAL is 4.85 times less risky than Syndax Pharmaceuticals. The stock trades about -0.17 of its potential returns per unit of risk. The Syndax Pharmaceuticals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Syndax Pharmaceuticals on October 14, 2024 and sell it today you would earn a total of 50.00 from holding Syndax Pharmaceuticals or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN LIFE FINANCIAL vs. Syndax Pharmaceuticals
Performance |
| Timeline |
| SUN LIFE FINANCIAL |
| Syndax Pharmaceuticals |
SUN LIFE and Syndax Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN LIFE and Syndax Pharmaceuticals
The main advantage of trading using opposite SUN LIFE and Syndax Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN LIFE 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 SUN LIFE FINANCIAL 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.| Syndax Pharmaceuticals vs. SUN LIFE FINANCIAL | Syndax Pharmaceuticals vs. CDN IMPERIAL BANK | Syndax Pharmaceuticals vs. Commonwealth Bank of | Syndax Pharmaceuticals vs. COREBRIDGE FINANCIAL INC |
Check out your portfolio center.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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