Correlation Between Candel Therapeutics and Protagenic Therapeutics

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

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

Diversification Opportunities for Candel Therapeutics and Protagenic Therapeutics

0.17

Correlation Coefficient

Candel Therapeutics  Protagenic Therapeutics

Average diversification

The 3 months correlation between Candel and Protagenic is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics 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 Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Protagenic Therapeutics go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Protagenic Therapeutics

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Protagenic Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Candel Therapeutics is 4.24 times less risky than Protagenic Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Protagenic Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.45  in Protagenic Therapeutics on December 30, 2024 and sell it today you would lose (0.11) from holding Protagenic Therapeutics or give up 24.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	25.81%
Values	Daily Returns

Candel Therapeutics  vs.  Protagenic Therapeutics

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 unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Protagenic Therapeutics

Risk-Adjusted Performance

Modest

Over the last 90 days Protagenic Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Protagenic Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Candel Therapeutics and Protagenic Therapeutics

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

The idea behind Candel Therapeutics and Protagenic Therapeutics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.