Correlation Between Candel Therapeutics and MISUMI

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

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

Diversification Opportunities for Candel Therapeutics and MISUMI

0.67

Correlation Coefficient

Candel Therapeutics  MISUMI

Poor diversification

The 3 months correlation between Candel and MISUMI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Candel Therapeutics and MISUMI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISUMI Group 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 MISUMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISUMI Group has no effect on the direction of Candel Therapeutics i.e., Candel Therapeutics and MISUMI go up and down completely randomly.

Pair Corralation between Candel Therapeutics and MISUMI

Given the investment horizon of 90 days Candel Therapeutics is expected to generate 4.32 times more return on investment than MISUMI. However, Candel Therapeutics is 4.32 times more volatile than MISUMI Group. It trades about 0.03 of its potential returns per unit of risk. MISUMI Group is currently generating about -0.04 per unit of risk. If you would invest  728.00  in Candel Therapeutics on September 15, 2024 and sell it today you would lose (53.00) from holding Candel Therapeutics or give up 7.28% of portfolio value over 90 days.

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

Candel Therapeutics  vs.  MISUMI Group

Candel Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, Candel Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

MISUMI Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MISUMI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, MISUMI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Candel Therapeutics and MISUMI

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

The idea behind Candel Therapeutics and MISUMI Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.