Correlation Between Candel Therapeutics and Viking Therapeutics

Can any of the company-specific risk be diversified away by investing in both Candel Therapeutics and Viking 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 Viking 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 Viking Therapeutics, you can compare the effects of market volatilities on Candel Therapeutics and Viking 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 Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Candel Therapeutics and Viking Therapeutics.

Diversification Opportunities for Candel Therapeutics and Viking Therapeutics

0.12

Correlation Coefficient

Candel Therapeutics  Viking Therapeutics

Average diversification

The 3 months correlation between Candel and Viking is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking 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 Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Viking Therapeutics go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Viking Therapeutics

Given the investment horizon of 90 days Candel Therapeutics is expected to generate 1.33 times more return on investment than Viking Therapeutics. However, Candel Therapeutics is 1.33 times more volatile than Viking Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Viking Therapeutics is currently generating about -0.12 per unit of risk. If you would invest  795.00  in Candel Therapeutics on December 28, 2024 and sell it today you would lose (100.00) from holding Candel Therapeutics or give up 12.58% of portfolio value over 90 days.

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

Candel Therapeutics  vs.  Viking 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 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.

Viking Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viking Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Candel Therapeutics and Viking Therapeutics

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

The idea behind Candel Therapeutics and Viking 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.