Correlation Between Virax Biolabs and Candel Therapeutics

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

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

Diversification Opportunities for Virax Biolabs and Candel Therapeutics

0.36

Correlation Coefficient

Virax Biolabs  Candel Therapeutics

Weak diversification

The 3 months correlation between Virax and Candel is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Virax Biolabs Group and Candel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candel Therapeutics and Virax Biolabs 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 Virax Biolabs Group 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 Virax Biolabs i.e., Virax Biolabs and Candel Therapeutics go up and down completely randomly.

Pair Corralation between Virax Biolabs and Candel Therapeutics

Given the investment horizon of 90 days Virax Biolabs Group is expected to under-perform the Candel Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Virax Biolabs Group is 1.54 times less risky than Candel Therapeutics. The stock trades about -0.26 of its potential returns per unit of risk. The Candel Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  465.00  in Candel Therapeutics on September 12, 2024 and sell it today you would lose (4.00) from holding Candel Therapeutics or give up 0.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Virax Biolabs Group  vs.  Candel Therapeutics

Virax Biolabs Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virax Biolabs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 Virax Biolabs and Candel Therapeutics

The main advantage of trading using opposite Virax Biolabs and Candel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virax Biolabs 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 Virax Biolabs Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.