Correlation Between Candel Therapeutics and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Kronos Bio 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 Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Kronos Bio, you can compare the effects of market volatilities on Candel Therapeutics and Kronos Bio 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 Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Kronos Bio.
Diversification Opportunities for Candel Therapeutics and Kronos Bio
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Candel and Kronos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio 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 Kronos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Bio has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Kronos Bio go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Kronos Bio
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 5.21 times less return on investment than Kronos Bio. In addition to that, Candel Therapeutics is 1.7 times more volatile than Kronos Bio. It trades about 0.03 of its total potential returns per unit of risk. Kronos Bio is currently generating about 0.23 per unit of volatility. If you would invest 87.00 in Kronos Bio on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Kronos Bio or generate 20.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Candel Therapeutics vs. Kronos Bio
Performance |
| Timeline |
| Candel Therapeutics |
| Kronos Bio |
Candel Therapeutics and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Kronos Bio
The main advantage of trading using opposite Candel Therapeutics and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Kronos Bio 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 Kronos Bio will offset losses from the drop in Kronos Bio's long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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