Correlation Between Candel Therapeutics and Protokinetix

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

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

Diversification Opportunities for Candel Therapeutics and Protokinetix

0.15

Correlation Coefficient

Candel Therapeutics  Protokinetix

Average diversification

The 3 months correlation between Candel and Protokinetix is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Protokinetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protokinetix 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 Protokinetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protokinetix has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Protokinetix go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Protokinetix

Given the investment horizon of 90 days Candel Therapeutics is expected to generate 6.81 times less return on investment than Protokinetix. But when comparing it to its historical volatility, Candel Therapeutics is 1.55 times less risky than Protokinetix. It trades about 0.01 of its potential returns per unit of risk. Protokinetix is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.99  in Protokinetix on December 22, 2024 and sell it today you would earn a total of  0.09  from holding Protokinetix or generate 9.09% return on investment over 90 days.

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

Candel Therapeutics  vs.  Protokinetix

Candel Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Protokinetix

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Protokinetix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Protokinetix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Candel Therapeutics and Protokinetix

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

The idea behind Candel Therapeutics and Protokinetix 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.