Correlation Between Candel Therapeutics and XORTX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and XORTX Therapeutics 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 XORTX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and XORTX Therapeutics, you can compare the effects of market volatilities on Candel Therapeutics and XORTX Therapeutics 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 XORTX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and XORTX Therapeutics.
Diversification Opportunities for Candel Therapeutics and XORTX Therapeutics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Candel and XORTX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and XORTX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XORTX Therapeutics 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 XORTX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XORTX Therapeutics has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and XORTX Therapeutics go up and down completely randomly.
Pair Corralation between Candel Therapeutics and XORTX Therapeutics
Given the investment horizon of 90 days Candel Therapeutics is expected to generate 1.53 times more return on investment than XORTX Therapeutics. However, Candel Therapeutics is 1.53 times more volatile than XORTX Therapeutics. It trades about 0.06 of its potential returns per unit of risk. XORTX Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 657.00 in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of 118.00 from holding Candel Therapeutics or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Candel Therapeutics vs. XORTX Therapeutics
Performance |
| Timeline |
| Candel Therapeutics |
| XORTX Therapeutics |
Candel Therapeutics and XORTX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Candel Therapeutics and XORTX Therapeutics
The main advantage of trading using opposite Candel Therapeutics and XORTX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, XORTX Therapeutics 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 XORTX Therapeutics will offset losses from the drop in XORTX Therapeutics' long position.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
| XORTX Therapeutics vs. Context Therapeutics | XORTX Therapeutics vs. Neurosense Therapeutics | XORTX Therapeutics vs. Quoin Pharmaceuticals Ltd | XORTX Therapeutics vs. Ensysce Biosciences |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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