Correlation Between Candel Therapeutics and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Lixte Biotechnology 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 Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Candel Therapeutics and Lixte Biotechnology 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 Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Lixte Biotechnology.
Diversification Opportunities for Candel Therapeutics and Lixte Biotechnology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Candel and Lixte is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Lixte Biotechnology
Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Lixte Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Candel Therapeutics is 2.88 times less risky than Lixte Biotechnology. The stock trades about -0.07 of its potential returns per unit of risk. The Lixte Biotechnology Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Lixte Biotechnology Holdings on September 5, 2024 and sell it today you would lose (0.54) from holding Lixte Biotechnology Holdings or give up 20.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Candel Therapeutics vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
| Candel Therapeutics |
| Lixte Biotechnology |
Candel Therapeutics and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Lixte Biotechnology
The main advantage of trading using opposite Candel Therapeutics and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Lixte Biotechnology vs. Candel Therapeutics | Lixte Biotechnology vs. Cingulate Warrants | Lixte Biotechnology vs. Unicycive Therapeutics | Lixte Biotechnology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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