Correlation Between Candel Therapeutics and Connect Biopharma
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Connect Biopharma 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 Connect Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Connect Biopharma Holdings, you can compare the effects of market volatilities on Candel Therapeutics and Connect Biopharma 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 Connect Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Connect Biopharma.
Diversification Opportunities for Candel Therapeutics and Connect Biopharma
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Candel and Connect is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Connect Biopharma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connect Biopharma 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 Connect Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connect Biopharma has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Connect Biopharma go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Connect Biopharma
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 1.95 times more return on investment than Connect Biopharma. However, Candel Therapeutics is 1.95 times more volatile than Connect Biopharma Holdings. It trades about 0.05 of its potential returns per unit of risk. Connect Biopharma Holdings is currently generating about 0.04 per unit of risk. If you would invest 189.00 in Candel Therapeutics on September 5, 2024 and sell it today you would earn a total of 262.00 from holding Candel Therapeutics or generate 138.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Candel Therapeutics vs. Connect Biopharma Holdings
Performance |
| Timeline |
| Candel Therapeutics |
| Connect Biopharma |
Candel Therapeutics and Connect Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Connect Biopharma
The main advantage of trading using opposite Candel Therapeutics and Connect Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Connect Biopharma 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 Connect Biopharma will offset losses from the drop in Connect Biopharma's long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Connect Biopharma vs. Candel Therapeutics | Connect Biopharma vs. Cingulate Warrants | Connect Biopharma vs. Unicycive Therapeutics | Connect Biopharma vs. Cardio Diagnostics Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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