Correlation Between Candel Therapeutics and Ocean Biomedical
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Ocean Biomedical 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 Ocean Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and Ocean Biomedical, you can compare the effects of market volatilities on Candel Therapeutics and Ocean Biomedical 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 Ocean Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Ocean Biomedical.
Diversification Opportunities for Candel Therapeutics and Ocean Biomedical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Candel and Ocean is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Ocean Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Biomedical 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 Ocean Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Biomedical has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Ocean Biomedical go up and down completely randomly.
Pair Corralation between Candel Therapeutics and Ocean Biomedical
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 1.28 times more return on investment than Ocean Biomedical. However, Candel Therapeutics is 1.28 times more volatile than Ocean Biomedical. It trades about 0.08 of its potential returns per unit of risk. Ocean Biomedical is currently generating about 0.0 per unit of risk. If you would invest 112.00 in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of 686.00 from holding Candel Therapeutics or generate 612.5% 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. Ocean Biomedical
Performance |
| Timeline |
| Candel Therapeutics |
| Ocean Biomedical |
Candel Therapeutics and Ocean Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and Ocean Biomedical
The main advantage of trading using opposite Candel Therapeutics and Ocean Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Ocean Biomedical 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 Ocean Biomedical will offset losses from the drop in Ocean Biomedical's long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| Ocean Biomedical vs. Equillium | Ocean Biomedical vs. DiaMedica Therapeutics | Ocean Biomedical vs. Valneva SE ADR | Ocean Biomedical 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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