Correlation Between CytomX Therapeutics and Clearside Biomedical

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

By analyzing existing cross correlation between CytomX Therapeutics and Clearside Biomedical, you can compare the effects of market volatilities on CytomX Therapeutics and Clearside Biomedical 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 CytomX Therapeutics with a short position of Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CytomX Therapeutics and Clearside Biomedical.

Diversification Opportunities for CytomX Therapeutics and Clearside Biomedical

0.14

Correlation Coefficient

CytomX Therapeutics  Clearside Biomedical

Average diversification

The 3 months correlation between CytomX and Clearside is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CytomX Therapeutics and Clearside Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearside Biomedical and CytomX 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 CytomX Therapeutics are associated (or correlated) with Clearside Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearside Biomedical has no effect on the direction of CytomX Therapeutics i.e., CytomX Therapeutics and Clearside Biomedical go up and down completely randomly.

Pair Corralation between CytomX Therapeutics and Clearside Biomedical

Given the investment horizon of 90 days CytomX Therapeutics is expected to under-perform the Clearside Biomedical. In addition to that, CytomX Therapeutics is 1.11 times more volatile than Clearside Biomedical. It trades about -0.14 of its total potential returns per unit of risk. Clearside Biomedical is currently generating about 0.0 per unit of volatility. If you would invest  99.00  in Clearside Biomedical on December 29, 2024 and sell it today you would lose (4.00) from holding Clearside Biomedical or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CytomX Therapeutics  vs.  Clearside Biomedical

CytomX Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days CytomX Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Clearside Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearside Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Clearside Biomedical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CytomX Therapeutics and Clearside Biomedical

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

The idea behind CytomX Therapeutics and Clearside Biomedical 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.