Correlation Between Candel Therapeutics and Senti Biosciences

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

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

Diversification Opportunities for Candel Therapeutics and Senti Biosciences

-0.18

Correlation Coefficient

Candel Therapeutics  Senti Biosciences

Good diversification

The 3 months correlation between Candel and Senti is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Senti Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senti Biosciences 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 Senti Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senti Biosciences has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Senti Biosciences go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Senti Biosciences

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Senti Biosciences. In addition to that, Candel Therapeutics is 1.04 times more volatile than Senti Biosciences. It trades about 0.0 of its total potential returns per unit of risk. Senti Biosciences is currently generating about 0.01 per unit of volatility. If you would invest  356.00  in Senti Biosciences on December 28, 2024 and sell it today you would lose (23.00) from holding Senti Biosciences or give up 6.46% of portfolio value over 90 days.

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

Candel Therapeutics  vs.  Senti Biosciences

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.

Senti Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Senti Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Senti Biosciences is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Candel Therapeutics and Senti Biosciences

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

The idea behind Candel Therapeutics and Senti Biosciences 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.