Correlation Between Cidara Therapeutics and Immunitybio
Can any of the company-specific risk be diversified away by investing in both Cidara Therapeutics and Immunitybio 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 Immunitybio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cidara Therapeutics and Immunitybio, you can compare the effects of market volatilities on Cidara Therapeutics and Immunitybio 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 Immunitybio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cidara Therapeutics and Immunitybio.
Diversification Opportunities for Cidara Therapeutics and Immunitybio
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cidara and Immunitybio is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cidara Therapeutics and Immunitybio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunitybio 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 Immunitybio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunitybio has no effect on the direction of Cidara Therapeutics i.e., Cidara Therapeutics and Immunitybio go up and down completely randomly.
Pair Corralation between Cidara Therapeutics and Immunitybio
Given the investment horizon of 90 days Cidara Therapeutics is expected to generate 1.05 times more return on investment than Immunitybio. However, Cidara Therapeutics is 1.05 times more volatile than Immunitybio. It trades about 0.38 of its potential returns per unit of risk. Immunitybio is currently generating about -0.13 per unit of risk. If you would invest 1,247 in Cidara Therapeutics on August 29, 2024 and sell it today you would earn a total of 712.00 from holding Cidara Therapeutics or generate 57.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cidara Therapeutics vs. Immunitybio
Performance |
| Timeline |
| Cidara Therapeutics |
| Immunitybio |
Cidara Therapeutics and Immunitybio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cidara Therapeutics and Immunitybio
The main advantage of trading using opposite Cidara Therapeutics and Immunitybio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cidara Therapeutics position performs unexpectedly, Immunitybio 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 Immunitybio will offset losses from the drop in Immunitybio's long position.| Cidara Therapeutics vs. CytomX Therapeutics | Cidara Therapeutics vs. Clearside Biomedical | Cidara Therapeutics vs. GlycoMimetics |
| Immunitybio vs. BioLineRx | Immunitybio vs. Ardelyx | Immunitybio vs. Lexicon Pharmaceuticals | Immunitybio vs. Seres Therapeutics |
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 CEOs Directory module to screen CEOs from public companies around the world.
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