Correlation Between Candel Therapeutics and Evogene

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

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

Diversification Opportunities for Candel Therapeutics and Evogene

0.87

Correlation Coefficient

Candel Therapeutics  Evogene

Very poor diversification

The 3 months correlation between Candel and Evogene is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene 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 Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Evogene go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Evogene

Given the investment horizon of 90 days Candel Therapeutics is expected to generate 1.86 times more return on investment than Evogene. However, Candel Therapeutics is 1.86 times more volatile than Evogene. It trades about 0.06 of its potential returns per unit of risk. Evogene is currently generating about -0.17 per unit of risk. If you would invest  657.00  in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of  118.00  from holding Candel Therapeutics or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Candel Therapeutics  vs.  Evogene

Candel Therapeutics

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Candel Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Evogene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evogene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Candel Therapeutics and Evogene

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

The idea behind Candel Therapeutics and Evogene 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.