Correlation Between Candel Therapeutics and Mirum Pharmaceuticals

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

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

Diversification Opportunities for Candel Therapeutics and Mirum Pharmaceuticals

0.28

Correlation Coefficient

Candel Therapeutics  Mirum Pharmaceuticals

Modest diversification

The 3 months correlation between Candel and Mirum is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Mirum Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirum Pharmaceuticals 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 Mirum Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirum Pharmaceuticals has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Mirum Pharmaceuticals go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Mirum Pharmaceuticals

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Mirum Pharmaceuticals. In addition to that, Candel Therapeutics is 2.52 times more volatile than Mirum Pharmaceuticals. It trades about 0.0 of its total potential returns per unit of risk. Mirum Pharmaceuticals is currently generating about 0.09 per unit of volatility. If you would invest  4,118  in Mirum Pharmaceuticals on December 28, 2024 and sell it today you would earn a total of  510.00  from holding Mirum Pharmaceuticals or generate 12.38% return on investment over 90 days.

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

Candel Therapeutics  vs.  Mirum Pharmaceuticals

Candel Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Candel Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Candel Therapeutics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mirum Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mirum Pharmaceuticals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Mirum Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Candel Therapeutics and Mirum Pharmaceuticals

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

The idea behind Candel Therapeutics and Mirum Pharmaceuticals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.