Correlation Between Merus BV and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Merus BV 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 Merus BV and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merus BV and Candel Therapeutics, you can compare the effects of market volatilities on Merus BV 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 Merus BV with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merus BV and Candel Therapeutics.
Diversification Opportunities for Merus BV and Candel Therapeutics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Merus and Candel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Merus BV and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Merus BV 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 Merus BV 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 Merus BV i.e., Merus BV and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Merus BV and Candel Therapeutics
Given the investment horizon of 90 days Merus BV is expected to generate 3.15 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Merus BV is 4.1 times less risky than Candel Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Candel Therapeutics on September 13, 2024 and sell it today you would earn a total of 623.00 from holding Candel Therapeutics or generate 409.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merus BV vs. Candel Therapeutics
Performance |
| Timeline |
| Merus BV |
| Candel Therapeutics |
Merus BV and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merus BV and Candel Therapeutics
The main advantage of trading using opposite Merus BV and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merus BV 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.| Merus BV vs. Anebulo Pharmaceuticals | Merus BV vs. Adagene | Merus BV vs. Acrivon Therapeutics, Common | Merus BV vs. AnaptysBio |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |