Correlation Between GT Biopharma and Candel Therapeutics

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

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

Diversification Opportunities for GT Biopharma and Candel Therapeutics

0.04

Correlation Coefficient

GT Biopharma  Candel Therapeutics

Significant diversification

The 3 months correlation between GTBP and Candel is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GT Biopharma and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and GT Biopharma 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 GT Biopharma are associated (or correlated) with Candel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Candel Therapeutics has no effect on the direction of GT Biopharma i.e., GT Biopharma and Candel Therapeutics go up and down completely randomly.

Pair Corralation between GT Biopharma and Candel Therapeutics

Given the investment horizon of 90 days GT Biopharma is expected to under-perform the Candel Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, GT Biopharma is 1.18 times less risky than Candel Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Candel Therapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  887.00  in Candel Therapeutics on December 27, 2024 and sell it today you would lose (137.00) from holding Candel Therapeutics or give up 15.45% of portfolio value over 90 days.

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

GT Biopharma  vs.  Candel Therapeutics

GT Biopharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days GT Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with GT Biopharma and Candel Therapeutics

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

The idea behind GT Biopharma and Candel 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.