Correlation Between Aldeyra and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Aldeyra and Candel 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 Aldeyra and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldeyra and Candel Therapeutics, you can compare the effects of market volatilities on Aldeyra and Candel 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 Aldeyra with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldeyra and Candel Therapeutics.
Diversification Opportunities for Aldeyra and Candel Therapeutics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aldeyra and Candel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aldeyra and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Aldeyra 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 Aldeyra are associated (or correlated) with Candel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Candel Therapeutics has no effect on the direction of Aldeyra i.e., Aldeyra and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Aldeyra and Candel Therapeutics
Given the investment horizon of 90 days Aldeyra is expected to generate 4.02 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Aldeyra is 2.36 times less risky than Candel Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 209.00 in Candel Therapeutics on August 30, 2024 and sell it today you would earn a total of 286.00 from holding Candel Therapeutics or generate 136.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aldeyra vs. Candel Therapeutics
Performance |
| Timeline |
| Aldeyra |
| Candel Therapeutics |
Aldeyra and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldeyra and Candel Therapeutics
The main advantage of trading using opposite Aldeyra and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldeyra position performs unexpectedly, Candel 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 Candel Therapeutics will offset losses from the drop in Candel Therapeutics' long position.| Aldeyra vs. Tarsus Pharmaceuticals | Aldeyra vs. Travere Therapeutics | Aldeyra vs. Eton Pharmaceuticals | Aldeyra vs. Viridian Therapeutics |
| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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