Correlation Between QuantumSi and Candel Therapeutics

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

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

Diversification Opportunities for QuantumSi and Candel Therapeutics

-0.11

Correlation Coefficient

QuantumSi  Candel Therapeutics

Good diversification

The 3 months correlation between QuantumSi and Candel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding QuantumSi and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and QuantumSi 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 QuantumSi 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 QuantumSi i.e., QuantumSi and Candel Therapeutics go up and down completely randomly.

Pair Corralation between QuantumSi and Candel Therapeutics

Considering the 90-day investment horizon QuantumSi is expected to generate 3.65 times more return on investment than Candel Therapeutics. However, QuantumSi is 3.65 times more volatile than Candel Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Candel Therapeutics is currently generating about -0.09 per unit of risk. If you would invest  91.00  in QuantumSi on September 5, 2024 and sell it today you would earn a total of  21.00  from holding QuantumSi or generate 23.08% return on investment over 90 days.

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

QuantumSi  vs.  Candel Therapeutics

QuantumSi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuantumSi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, QuantumSi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 QuantumSi and Candel Therapeutics

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

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.