Correlation Between Candel Therapeutics and Monopar Therapeutics

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

Diversification Opportunities for Candel Therapeutics and Monopar Therapeutics

-0.81

Correlation Coefficient

Candel Therapeutics  Monopar Therapeutics

Pay attention - limited upside

The 3 months correlation between Candel and Monopar is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and Monopar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monopar 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 Monopar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monopar Therapeutics has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and Monopar Therapeutics go up and down completely randomly.

Pair Corralation between Candel Therapeutics and Monopar Therapeutics

Given the investment horizon of 90 days Candel Therapeutics is expected to under-perform the Monopar Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Candel Therapeutics is 16.57 times less risky than Monopar Therapeutics. The stock trades about -0.1 of its potential returns per unit of risk. The Monopar Therapeutics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  243.00  in Monopar Therapeutics on September 5, 2024 and sell it today you would earn a total of  2,074  from holding Monopar Therapeutics or generate 853.5% return on investment over 90 days.

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

Candel Therapeutics  vs.  Monopar Therapeutics

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.

Monopar Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Candel Therapeutics and Monopar Therapeutics

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

The idea behind Candel Therapeutics and Monopar 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.