Correlation Between Erasca and Applied Molecular
Can any of the company-specific risk be diversified away by investing in both Erasca and Applied Molecular 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 Erasca and Applied Molecular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erasca Inc and Applied Molecular Transport, you can compare the effects of market volatilities on Erasca and Applied Molecular 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 Erasca with a short position of Applied Molecular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erasca and Applied Molecular.
Diversification Opportunities for Erasca and Applied Molecular
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erasca and Applied is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Erasca Inc and Applied Molecular Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Molecular and Erasca 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 Erasca Inc are associated (or correlated) with Applied Molecular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Molecular has no effect on the direction of Erasca i.e., Erasca and Applied Molecular go up and down completely randomly.
Pair Corralation between Erasca and Applied Molecular
Given the investment horizon of 90 days Erasca Inc is expected to generate 0.48 times more return on investment than Applied Molecular. However, Erasca Inc is 2.08 times less risky than Applied Molecular. It trades about -0.02 of its potential returns per unit of risk. Applied Molecular Transport is currently generating about -0.03 per unit of risk. If you would invest 728.00 in Erasca Inc on August 25, 2024 and sell it today you would lose (458.00) from holding Erasca Inc or give up 62.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
Erasca Inc vs. Applied Molecular Transport
Performance |
| Timeline |
| Erasca Inc |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Erasca and Applied Molecular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erasca and Applied Molecular
The main advantage of trading using opposite Erasca and Applied Molecular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erasca position performs unexpectedly, Applied Molecular 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 Applied Molecular will offset losses from the drop in Applied Molecular's long position.| Erasca vs. Eliem Therapeutics | Erasca vs. HCW Biologics | Erasca vs. RenovoRx | Erasca vs. Tempest Therapeutics |
| Applied Molecular vs. Aileron Therapeutics | Applied Molecular vs. Bio Path Holdings | Applied Molecular vs. Benitec Biopharma Ltd | Applied Molecular vs. Aerovate Therapeutics |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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