Correlation Between Mereo BioPharma and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Mereo BioPharma 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 Mereo BioPharma and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mereo BioPharma Group and Candel Therapeutics, you can compare the effects of market volatilities on Mereo BioPharma 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 Mereo BioPharma with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mereo BioPharma and Candel Therapeutics.
Diversification Opportunities for Mereo BioPharma and Candel Therapeutics
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mereo and Candel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mereo BioPharma Group and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Mereo BioPharma 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 Mereo BioPharma Group 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 Mereo BioPharma i.e., Mereo BioPharma and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Mereo BioPharma and Candel Therapeutics
Given the investment horizon of 90 days Mereo BioPharma Group is expected to generate 0.6 times more return on investment than Candel Therapeutics. However, Mereo BioPharma Group is 1.67 times less risky than Candel Therapeutics. It trades about -0.1 of its potential returns per unit of risk. Candel Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 401.00 in Mereo BioPharma Group on September 4, 2024 and sell it today you would lose (38.00) from holding Mereo BioPharma Group or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mereo BioPharma Group vs. Candel Therapeutics
Performance |
| Timeline |
| Mereo BioPharma Group |
| Candel Therapeutics |
Mereo BioPharma and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mereo BioPharma and Candel Therapeutics
The main advantage of trading using opposite Mereo BioPharma and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mereo BioPharma 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.| Mereo BioPharma vs. Candel Therapeutics | Mereo BioPharma vs. Cingulate Warrants | Mereo BioPharma vs. Unicycive Therapeutics | Mereo BioPharma vs. Cardio Diagnostics Holdings |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |