Correlation Between Candel Therapeutics and NRx Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and NRx Pharmaceuticals 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 NRx Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and NRx Pharmaceuticals, you can compare the effects of market volatilities on Candel Therapeutics and NRx Pharmaceuticals 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 NRx Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and NRx Pharmaceuticals.
Diversification Opportunities for Candel Therapeutics and NRx Pharmaceuticals
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Candel and NRx is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and NRx Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRx Pharmaceuticals 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 NRx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRx Pharmaceuticals has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and NRx Pharmaceuticals go up and down completely randomly.
Pair Corralation between Candel Therapeutics and NRx Pharmaceuticals
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 3.46 times less return on investment than NRx Pharmaceuticals. But when comparing it to its historical volatility, Candel Therapeutics is 3.65 times less risky than NRx Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. NRx Pharmaceuticals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in NRx Pharmaceuticals on September 4, 2024 and sell it today you would lose (4.40) from holding NRx Pharmaceuticals or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.26% |
| Values | Daily Returns |
Candel Therapeutics vs. NRx Pharmaceuticals
Performance |
| Timeline |
| Candel Therapeutics |
| NRx Pharmaceuticals |
Candel Therapeutics and NRx Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and NRx Pharmaceuticals
The main advantage of trading using opposite Candel Therapeutics and NRx Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, NRx Pharmaceuticals 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 NRx Pharmaceuticals will offset losses from the drop in NRx Pharmaceuticals' long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| NRx Pharmaceuticals vs. Candel Therapeutics | NRx Pharmaceuticals vs. Cingulate Warrants | NRx Pharmaceuticals vs. Unicycive Therapeutics | NRx Pharmaceuticals 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 CEOs Directory module to screen CEOs from public companies around the world.
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