Correlation Between Revolution Medicines, and Candel Therapeutics

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

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

Diversification Opportunities for Revolution Medicines, and Candel Therapeutics

-0.74

Correlation Coefficient

Revolution Medicines,  Candel Therapeutics

Pay attention - limited upside

The 3 months correlation between Revolution and Candel is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Revolution Medicines, Warrant and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Revolution Medicines, 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 Revolution Medicines, Warrant 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 Revolution Medicines, i.e., Revolution Medicines, and Candel Therapeutics go up and down completely randomly.

Pair Corralation between Revolution Medicines, and Candel Therapeutics

Assuming the 90 days horizon Revolution Medicines, Warrant is expected to generate 2.3 times more return on investment than Candel Therapeutics. However, Revolution Medicines, is 2.3 times more volatile than Candel Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Candel Therapeutics is currently generating about 0.06 per unit of risk. If you would invest  8.00  in Revolution Medicines, Warrant on September 12, 2024 and sell it today you would earn a total of  24.99  from holding Revolution Medicines, Warrant or generate 312.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Revolution Medicines, Warrant  vs.  Candel Therapeutics

Revolution Medicines,

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Revolution Medicines, Warrant are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Revolution Medicines, showed solid returns over the last few months and may actually be approaching a breakup point.

Candel Therapeutics

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Candel Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Candel Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revolution Medicines, and Candel Therapeutics

The main advantage of trading using opposite Revolution Medicines, and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revolution Medicines, 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 Revolution Medicines, Warrant 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.