Correlation Between Oxford BioDynamics and Cidara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Oxford BioDynamics 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 Oxford BioDynamics and Cidara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford BioDynamics Plc and Cidara Therapeutics, you can compare the effects of market volatilities on Oxford BioDynamics 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 Oxford BioDynamics with a short position of Cidara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford BioDynamics and Cidara Therapeutics.
Diversification Opportunities for Oxford BioDynamics and Cidara Therapeutics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxford and Cidara is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oxford BioDynamics Plc and Cidara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cidara Therapeutics and Oxford BioDynamics 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 Oxford BioDynamics Plc 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 Oxford BioDynamics i.e., Oxford BioDynamics and Cidara Therapeutics go up and down completely randomly.
Pair Corralation between Oxford BioDynamics and Cidara Therapeutics
Assuming the 90 days horizon Oxford BioDynamics Plc is expected to generate 12.62 times more return on investment than Cidara Therapeutics. However, Oxford BioDynamics is 12.62 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 0.06 per unit of risk. If you would invest 50.00 in Oxford BioDynamics Plc on September 14, 2024 and sell it today you would lose (49.00) from holding Oxford BioDynamics Plc or give up 98.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Oxford BioDynamics Plc vs. Cidara Therapeutics
Performance |
| Timeline |
| Oxford BioDynamics Plc |
| Cidara Therapeutics |
Oxford BioDynamics and Cidara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford BioDynamics and Cidara Therapeutics
The main advantage of trading using opposite Oxford BioDynamics and Cidara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford BioDynamics 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.| Oxford BioDynamics vs. Protalix Biotherapeutics | Oxford BioDynamics vs. Seres Therapeutics | Oxford BioDynamics vs. Cidara Therapeutics | Oxford BioDynamics vs. Immunitybio |
| Cidara Therapeutics vs. Puma Biotechnology | Cidara Therapeutics vs. Iovance Biotherapeutics | Cidara Therapeutics vs. Day One Biopharmaceuticals | Cidara Therapeutics vs. Inozyme Pharma |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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