Correlation Between Candel Therapeutics and Adagene
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Adagene 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 Candel Therapeutics and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Adagene, you can compare the effects of market volatilities on Candel Therapeutics and Adagene 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 Candel Therapeutics with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Adagene.
Diversification Opportunities for Candel Therapeutics and Adagene
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Candel and Adagene is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Candel 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 Candel Therapeutics are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Adagene go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Adagene
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 2.4 times more return on investment than Adagene. However, Candel Therapeutics is 2.4 times more volatile than Adagene. It trades about 0.05 of its potential returns per unit of risk. Adagene is currently generating about 0.04 per unit of risk. If you would invest 198.00 in Candel Therapeutics on August 31, 2024 and sell it today you would earn a total of 272.50 from holding Candel Therapeutics or generate 137.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Candel Therapeutics vs. Adagene
Performance |
| Timeline |
| Candel Therapeutics |
| Adagene |
Candel Therapeutics and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Adagene
The main advantage of trading using opposite Candel Therapeutics and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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