Correlation Between Cidara Therapeutics and Xeris Pharmaceuticals

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

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

Diversification Opportunities for Cidara Therapeutics and Xeris Pharmaceuticals

0.64

Correlation Coefficient

Cidara Therapeutics  Xeris Pharmaceuticals

Poor diversification

The 3 months correlation between Cidara and Xeris is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cidara Therapeutics and Xeris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeris Pharmaceuticals 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 Xeris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeris Pharmaceuticals has no effect on the direction of Cidara Therapeutics i.e., Cidara Therapeutics and Xeris Pharmaceuticals go up and down completely randomly.

Pair Corralation between Cidara Therapeutics and Xeris Pharmaceuticals

Given the investment horizon of 90 days Cidara Therapeutics is expected to generate 2.02 times more return on investment than Xeris Pharmaceuticals. However, Cidara Therapeutics is 2.02 times more volatile than Xeris Pharmaceuticals. It trades about 0.19 of its potential returns per unit of risk. Xeris Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  1,260  in Cidara Therapeutics on October 25, 2024 and sell it today you would earn a total of  939.00  from holding Cidara Therapeutics or generate 74.52% 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.  Xeris Pharmaceuticals

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.

Xeris Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xeris Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Xeris Pharmaceuticals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cidara Therapeutics and Xeris Pharmaceuticals

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

The idea behind Cidara Therapeutics and Xeris Pharmaceuticals 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.