Correlation Between Seres Therapeutics and Cidara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics 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 Seres Therapeutics and Cidara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Cidara Therapeutics, you can compare the effects of market volatilities on Seres Therapeutics 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 Seres Therapeutics with a short position of Cidara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Cidara Therapeutics.
Diversification Opportunities for Seres Therapeutics and Cidara Therapeutics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seres and Cidara is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Cidara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cidara Therapeutics and Seres 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 Seres Therapeutics 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 Seres Therapeutics i.e., Seres Therapeutics and Cidara Therapeutics go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Cidara Therapeutics
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 1.29 times more return on investment than Cidara Therapeutics. However, Seres Therapeutics is 1.29 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 -0.13 per unit of risk. If you would invest 85.00 in Seres Therapeutics on November 9, 2024 and sell it today you would lose (7.00) from holding Seres Therapeutics or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Cidara Therapeutics
Performance |
| Timeline |
| Seres Therapeutics |
| Cidara Therapeutics |
Seres Therapeutics and Cidara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Cidara Therapeutics
The main advantage of trading using opposite Seres Therapeutics and Cidara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics 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.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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