Correlation Between Candel Therapeutics and Erasca

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

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

Diversification Opportunities for Candel Therapeutics and Erasca

-0.12

Correlation Coefficient

Candel Therapeutics  Erasca

Good diversification

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

Pair Corralation between Candel Therapeutics and Erasca

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Erasca. In addition to that, Candel Therapeutics is 1.42 times more volatile than Erasca Inc. It trades about -0.07 of its total potential returns per unit of risk. Erasca Inc is currently generating about 0.09 per unit of volatility. If you would invest  287.00  in Erasca Inc on September 5, 2024 and sell it today you would earn a total of  20.00  from holding Erasca Inc or generate 6.97% return on investment over 90 days.

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

Candel Therapeutics  vs.  Erasca Inc

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.

Erasca Inc

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Erasca Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Erasca may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Candel Therapeutics and Erasca

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

The idea behind Candel Therapeutics and Erasca Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.