Correlation Between Candel Therapeutics and Bionomics

Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Bionomics 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 Candel Therapeutics and Bionomics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Candel Therapeutics and Bionomics Limited, you can compare the effects of market volatilities on Candel Therapeutics and Bionomics 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 Candel Therapeutics with a short position of Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Bionomics.

Diversification Opportunities for Candel Therapeutics and Bionomics

0.46

Correlation Coefficient

Candel Therapeutics  Bionomics

Very weak diversification

The 3 months correlation between Candel and Bionomics is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited and Candel 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 Candel Therapeutics are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Bionomics go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Bionomics

Given the investment horizon of 90 days Candel Therapeutics is expected to generate 6.36 times less return on investment than Bionomics. But when comparing it to its historical volatility, Candel Therapeutics is 2.68 times less risky than Bionomics. It trades about 0.05 of its potential returns per unit of risk. Bionomics Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2.93  in Bionomics Limited on September 10, 2024 and sell it today you would lose (1.62) from holding Bionomics Limited or give up 55.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	29.7%
Values	Daily Returns

Candel Therapeutics  vs.  Bionomics Limited

Candel Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Candel Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bionomics Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionomics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bionomics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Candel Therapeutics and Bionomics

The main advantage of trading using opposite Candel Therapeutics and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.

The idea behind Candel Therapeutics and Bionomics Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.