Correlation Between Gain Therapeutics and Candel Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Gain Therapeutics 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 Gain Therapeutics and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gain Therapeutics and Candel Therapeutics, you can compare the effects of market volatilities on Gain Therapeutics 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 Gain Therapeutics with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and Candel Therapeutics.

Diversification Opportunities for Gain Therapeutics and Candel Therapeutics

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Gain and Candel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Gain 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 Gain Therapeutics 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 Gain Therapeutics i.e., Gain Therapeutics and Candel Therapeutics go up and down completely randomly.

Pair Corralation between Gain Therapeutics and Candel Therapeutics

Given the investment horizon of 90 days Gain Therapeutics is expected to generate 38.25 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Gain Therapeutics is 3.23 times less risky than Candel Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  173.00  in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of  1,178  from holding Candel Therapeutics or generate 680.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gain Therapeutics  vs.  Candel Therapeutics

 Performance 
       Timeline  
Gain Therapeutics 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Gain Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gain Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.
Candel Therapeutics 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Candel Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Gain Therapeutics and Candel Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gain Therapeutics and Candel Therapeutics

The main advantage of trading using opposite Gain Therapeutics and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gain Therapeutics 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 Gain Therapeutics 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.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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