Correlation Between Cidara Therapeutics and Elevation Oncology
Can any of the company-specific risk be diversified away by investing in both Cidara Therapeutics and Elevation Oncology 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 Cidara Therapeutics and Elevation Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cidara Therapeutics and Elevation Oncology, you can compare the effects of market volatilities on Cidara Therapeutics and Elevation Oncology 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 Cidara Therapeutics with a short position of Elevation Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cidara Therapeutics and Elevation Oncology.
Diversification Opportunities for Cidara Therapeutics and Elevation Oncology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cidara and Elevation is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cidara Therapeutics and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Cidara Therapeutics 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 Cidara Therapeutics are associated (or correlated) with Elevation Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Oncology has no effect on the direction of Cidara Therapeutics i.e., Cidara Therapeutics and Elevation Oncology go up and down completely randomly.
Pair Corralation between Cidara Therapeutics and Elevation Oncology
Given the investment horizon of 90 days Cidara Therapeutics is expected to generate 7.46 times less return on investment than Elevation Oncology. But when comparing it to its historical volatility, Cidara Therapeutics is 1.99 times less risky than Elevation Oncology. It trades about 0.01 of its potential returns per unit of risk. Elevation Oncology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Elevation Oncology on November 9, 2024 and sell it today you would lose (33.00) from holding Elevation Oncology or give up 33.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cidara Therapeutics vs. Elevation Oncology
Performance |
| Timeline |
| Cidara Therapeutics |
| Elevation Oncology |
Cidara Therapeutics and Elevation Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cidara Therapeutics and Elevation Oncology
The main advantage of trading using opposite Cidara Therapeutics and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cidara Therapeutics position performs unexpectedly, Elevation Oncology 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 Elevation Oncology will offset losses from the drop in Elevation Oncology's long position.| Cidara Therapeutics vs. CytomX Therapeutics | Cidara Therapeutics vs. Clearside Biomedical | Cidara Therapeutics vs. GlycoMimetics |
| Elevation Oncology vs. Ocean Biomedical | Elevation Oncology vs. Zura Bio Limited | Elevation Oncology vs. Enveric Biosciences | Elevation Oncology vs. Hepion Pharmaceuticals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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