Correlation Between ABVC Biopharma and Candel Therapeutics

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

Diversification Opportunities for ABVC Biopharma and Candel Therapeutics

0.61

Correlation Coefficient

ABVC Biopharma  Candel Therapeutics

Poor diversification

The 3 months correlation between ABVC and Candel is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ABVC Biopharma and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and ABVC 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 ABVC 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 ABVC Biopharma i.e., ABVC Biopharma and Candel Therapeutics go up and down completely randomly.

Pair Corralation between ABVC Biopharma and Candel Therapeutics

Given the investment horizon of 90 days ABVC Biopharma is expected to generate 1.27 times more return on investment than Candel Therapeutics. However, ABVC Biopharma is 1.27 times more volatile than Candel Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Candel Therapeutics is currently generating about -0.09 per unit of risk. If you would invest  65.00  in ABVC Biopharma on September 5, 2024 and sell it today you would lose (11.00) from holding ABVC Biopharma or give up 16.92% of portfolio value over 90 days.

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

ABVC Biopharma  vs.  Candel Therapeutics

ABVC Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABVC Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Candel Therapeutics

Risk-Adjusted Performance

0 of 100

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ABVC Biopharma and Candel Therapeutics

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

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.