Correlation Between Elevation Oncology and Cidara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Elevation Oncology and Cidara Therapeutics 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 Elevation Oncology and Cidara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevation Oncology and Cidara Therapeutics, you can compare the effects of market volatilities on Elevation Oncology and Cidara Therapeutics 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 Elevation Oncology with a short position of Cidara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevation Oncology and Cidara Therapeutics.
Diversification Opportunities for Elevation Oncology and Cidara Therapeutics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elevation and Cidara is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and Cidara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cidara Therapeutics and Elevation Oncology 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 Elevation Oncology are associated (or correlated) with Cidara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cidara Therapeutics has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and Cidara Therapeutics go up and down completely randomly.
Pair Corralation between Elevation Oncology and Cidara Therapeutics
Given the investment horizon of 90 days Elevation Oncology is expected to generate 1.99 times more return on investment than Cidara Therapeutics. However, Elevation Oncology is 1.99 times more volatile than Cidara Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Cidara Therapeutics is currently generating about 0.01 per unit of risk. 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 |
Elevation Oncology vs. Cidara Therapeutics
Performance |
| Timeline |
| Elevation Oncology |
| Cidara Therapeutics |
Elevation Oncology and Cidara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevation Oncology and Cidara Therapeutics
The main advantage of trading using opposite Elevation Oncology and Cidara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevation Oncology position performs unexpectedly, Cidara Therapeutics 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 Cidara Therapeutics will offset losses from the drop in Cidara Therapeutics' long position.| Elevation Oncology vs. Ocean Biomedical | Elevation Oncology vs. Zura Bio Limited | Elevation Oncology vs. Enveric Biosciences | Elevation Oncology vs. Hepion Pharmaceuticals |
| Cidara Therapeutics vs. CytomX Therapeutics | Cidara Therapeutics vs. Clearside Biomedical | Cidara Therapeutics vs. GlycoMimetics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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