Correlation Between Candel Therapeutics and Precision BioSciences
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Precision BioSciences 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 Precision BioSciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Precision BioSciences, you can compare the effects of market volatilities on Candel Therapeutics and Precision BioSciences 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 Precision BioSciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Precision BioSciences.
Diversification Opportunities for Candel Therapeutics and Precision BioSciences
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Candel and Precision is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Precision BioSciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision BioSciences 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 Precision BioSciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision BioSciences has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Precision BioSciences go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Precision BioSciences
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 3.45 times more return on investment than Precision BioSciences. However, Candel Therapeutics is 3.45 times more volatile than Precision BioSciences. It trades about 0.07 of its potential returns per unit of risk. Precision BioSciences is currently generating about -0.04 per unit of risk. If you would invest 173.00 in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of 1,178 from holding Candel Therapeutics or generate 680.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Candel Therapeutics vs. Precision BioSciences
Performance |
| Timeline |
| Candel Therapeutics |
| Precision BioSciences |
Candel Therapeutics and Precision BioSciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Precision BioSciences
The main advantage of trading using opposite Candel Therapeutics and Precision BioSciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Precision BioSciences 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 Precision BioSciences will offset losses from the drop in Precision BioSciences' long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Precision BioSciences vs. Equillium | Precision BioSciences vs. DiaMedica Therapeutics | Precision BioSciences vs. Valneva SE ADR | Precision BioSciences vs. Vivani Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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