Correlation Between Candel Therapeutics and OKYO Pharma

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Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and OKYO Pharma 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 OKYO Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Candel Therapeutics and OKYO Pharma Ltd, you can compare the effects of market volatilities on Candel Therapeutics and OKYO Pharma 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 OKYO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and OKYO Pharma.

Diversification Opportunities for Candel Therapeutics and OKYO Pharma

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Candel and OKYO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and OKYO Pharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OKYO Pharma 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 OKYO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OKYO Pharma has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and OKYO Pharma go up and down completely randomly.

Pair Corralation between Candel Therapeutics and OKYO Pharma

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the OKYO Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Candel Therapeutics is 1.32 times less risky than OKYO Pharma. The stock trades about -0.06 of its potential returns per unit of risk. The OKYO Pharma Ltd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  127.00  in OKYO Pharma Ltd on September 5, 2024 and sell it today you would lose (25.90) from holding OKYO Pharma Ltd or give up 20.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Candel Therapeutics  vs.  OKYO Pharma Ltd

 Performance 
       Timeline  
Candel Therapeutics 

Risk-Adjusted Performance

0 of 100

 
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Strong
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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.
OKYO Pharma 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OKYO Pharma Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, OKYO Pharma is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Candel Therapeutics and OKYO Pharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Candel Therapeutics and OKYO Pharma

The main advantage of trading using opposite Candel Therapeutics and OKYO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Candel Therapeutics position performs unexpectedly, OKYO Pharma 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 OKYO Pharma will offset losses from the drop in OKYO Pharma's long position.
The idea behind Candel Therapeutics and OKYO Pharma Ltd 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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