Correlation Between Toronto Dominion and Candel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion 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 Toronto Dominion and Candel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toronto Dominion Bank and Candel Therapeutics, you can compare the effects of market volatilities on Toronto Dominion 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 Toronto Dominion with a short position of Candel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Candel Therapeutics.
Diversification Opportunities for Toronto Dominion and Candel Therapeutics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Toronto and Candel is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Toronto Dominion 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 Toronto Dominion Bank 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 Toronto Dominion i.e., Toronto Dominion and Candel Therapeutics go up and down completely randomly.
Pair Corralation between Toronto Dominion and Candel Therapeutics
Allowing for the 90-day total investment horizon Toronto Dominion is expected to generate 6.39 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Toronto Dominion Bank is 14.22 times less risky than Candel Therapeutics. It trades about 0.25 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 514.00 in Candel Therapeutics on December 6, 2024 and sell it today you would earn a total of 300.00 from holding Candel Therapeutics or generate 58.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toronto Dominion Bank vs. Candel Therapeutics
Performance |
| Timeline |
| Toronto Dominion Bank |
| Candel Therapeutics |
Toronto Dominion and Candel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and Candel Therapeutics
The main advantage of trading using opposite Toronto Dominion and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion 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.| Toronto Dominion vs. Bank of Montreal | ||
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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