Correlation Between Plus Therapeutics and Candel Therapeutics

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

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

Diversification Opportunities for Plus Therapeutics and Candel Therapeutics

0.75

Correlation Coefficient

Plus Therapeutics  Candel Therapeutics

Poor diversification

The 3 months correlation between Plus and Candel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Plus Therapeutics and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Plus 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 Plus Therapeutics 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 Plus Therapeutics i.e., Plus Therapeutics and Candel Therapeutics go up and down completely randomly.

Pair Corralation between Plus Therapeutics and Candel Therapeutics

Given the investment horizon of 90 days Plus Therapeutics is expected to generate 5.61 times less return on investment than Candel Therapeutics. But when comparing it to its historical volatility, Plus Therapeutics is 4.54 times less risky than Candel Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  465.00  in Candel Therapeutics on September 12, 2024 and sell it today you would earn a total of  310.00  from holding Candel Therapeutics or generate 66.67% return on investment over 90 days.

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

Plus Therapeutics  vs.  Candel Therapeutics

Plus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Plus Therapeutics is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Candel Therapeutics

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Candel Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plus Therapeutics and Candel Therapeutics

The main advantage of trading using opposite Plus Therapeutics and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plus Therapeutics 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 Plus Therapeutics 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.