Correlation Between Cidara Therapeutics and Hepion Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Cidara Therapeutics and Hepion 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 Cidara Therapeutics and Hepion Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cidara Therapeutics and Hepion Pharmaceuticals, you can compare the effects of market volatilities on Cidara Therapeutics and Hepion 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 Cidara Therapeutics with a short position of Hepion Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cidara Therapeutics and Hepion Pharmaceuticals.
Diversification Opportunities for Cidara Therapeutics and Hepion Pharmaceuticals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cidara and Hepion is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cidara Therapeutics and Hepion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hepion Pharmaceuticals 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 Hepion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hepion Pharmaceuticals has no effect on the direction of Cidara Therapeutics i.e., Cidara Therapeutics and Hepion Pharmaceuticals go up and down completely randomly.
Pair Corralation between Cidara Therapeutics and Hepion Pharmaceuticals
Given the investment horizon of 90 days Cidara Therapeutics is expected to generate 0.26 times more return on investment than Hepion Pharmaceuticals. However, Cidara Therapeutics is 3.92 times less risky than Hepion Pharmaceuticals. It trades about -0.13 of its potential returns per unit of risk. Hepion Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 2,488 in Cidara Therapeutics on November 9, 2024 and sell it today you would lose (365.00) from holding Cidara Therapeutics or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cidara Therapeutics vs. Hepion Pharmaceuticals
Performance |
| Timeline |
| Cidara Therapeutics |
| Hepion Pharmaceuticals |
Cidara Therapeutics and Hepion Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cidara Therapeutics and Hepion Pharmaceuticals
The main advantage of trading using opposite Cidara Therapeutics and Hepion Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cidara Therapeutics position performs unexpectedly, Hepion 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 Hepion Pharmaceuticals will offset losses from the drop in Hepion Pharmaceuticals' long position.| Cidara Therapeutics vs. CytomX Therapeutics | Cidara Therapeutics vs. Clearside Biomedical | Cidara Therapeutics vs. GlycoMimetics |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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