Correlation Between Cidara Therapeutics and Priorityome Fund

Can any of the company-specific risk be diversified away by investing in both Cidara Therapeutics and Priorityome Fund 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 Priorityome Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cidara Therapeutics and Priorityome Fund, you can compare the effects of market volatilities on Cidara Therapeutics and Priorityome Fund 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 Priorityome Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cidara Therapeutics and Priorityome Fund.

Diversification Opportunities for Cidara Therapeutics and Priorityome Fund

-0.39

Correlation Coefficient

Cidara Therapeutics  Priorityome Fund

Very good diversification

The 3 months correlation between Cidara and Priorityome is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cidara Therapeutics and Priorityome Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Priorityome Fund 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 Priorityome Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Priorityome Fund has no effect on the direction of Cidara Therapeutics i.e., Cidara Therapeutics and Priorityome Fund go up and down completely randomly.

Pair Corralation between Cidara Therapeutics and Priorityome Fund

Given the investment horizon of 90 days Cidara Therapeutics is expected to generate 27.87 times more return on investment than Priorityome Fund. However, Cidara Therapeutics is 27.87 times more volatile than Priorityome Fund. It trades about 0.04 of its potential returns per unit of risk. Priorityome Fund is currently generating about 0.03 per unit of risk. If you would invest  3,020  in Cidara Therapeutics on October 25, 2024 and sell it today you would lose (821.00) from holding Cidara Therapeutics or give up 27.19% 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.  Priorityome Fund

Cidara Therapeutics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cidara Therapeutics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cidara Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Priorityome Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Priorityome Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Priorityome Fund is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cidara Therapeutics and Priorityome Fund

The main advantage of trading using opposite Cidara Therapeutics and Priorityome Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cidara Therapeutics position performs unexpectedly, Priorityome Fund 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 Priorityome Fund will offset losses from the drop in Priorityome Fund's long position.

The idea behind Cidara Therapeutics and Priorityome Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.