Correlation Between Nautilus Biotechnology and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Nautilus Biotechnology 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 Nautilus Biotechnology and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nautilus Biotechnology and Candel Therapeutics, you can compare the effects of market volatilities on Nautilus Biotechnology 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 Nautilus Biotechnology with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nautilus Biotechnology and Candel Therapeutics.
Diversification Opportunities for Nautilus Biotechnology and Candel Therapeutics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nautilus and Candel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nautilus Biotechnology and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Nautilus Biotechnology 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 Nautilus Biotechnology 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 Nautilus Biotechnology i.e., Nautilus Biotechnology and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Nautilus Biotechnology and Candel Therapeutics
Given the investment horizon of 90 days Nautilus Biotechnology is expected to generate 8.22 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Nautilus Biotechnology is 3.72 times less risky than Candel Therapeutics. It trades about 0.03 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nautilus Biotechnology vs. Candel Therapeutics
Performance |
| Timeline |
| Nautilus Biotechnology |
| Candel Therapeutics |
Nautilus Biotechnology and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nautilus Biotechnology and Candel Therapeutics
The main advantage of trading using opposite Nautilus Biotechnology and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nautilus Biotechnology 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 Nautilus Biotechnology 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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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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