Correlation Between Compugen and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Compugen and Candel 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 Compugen and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Candel Therapeutics, you can compare the effects of market volatilities on Compugen and Candel 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 Compugen with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Candel Therapeutics.
Diversification Opportunities for Compugen and Candel Therapeutics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compugen and Candel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Compugen 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 Compugen are associated (or correlated) with Candel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Candel Therapeutics has no effect on the direction of Compugen i.e., Compugen and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Compugen and Candel Therapeutics
Given the investment horizon of 90 days Compugen is expected to under-perform the Candel Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Compugen is 1.68 times less risky than Candel Therapeutics. The stock trades about -0.22 of its potential returns per unit of risk. The Candel Therapeutics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Candel Therapeutics on August 26, 2024 and sell it today you would lose (56.00) from holding Candel Therapeutics or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugen vs. Candel Therapeutics
Performance |
| Timeline |
| Compugen |
| Candel Therapeutics |
Compugen and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Candel Therapeutics
The main advantage of trading using opposite Compugen and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Candel 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 Candel Therapeutics will offset losses from the drop in Candel Therapeutics' long position.The idea behind Compugen and Candel Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Candel Therapeutics vs. Aerovate Therapeutics | Candel Therapeutics vs. Adagene | Candel Therapeutics vs. Acrivon Therapeutics, Common | Candel Therapeutics vs. Rezolute |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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