Correlation Between Erasca and Compass Therapeutics
Can any of the company-specific risk be diversified away by investing in both Erasca and Compass 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 Erasca and Compass Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erasca Inc and Compass Therapeutics, you can compare the effects of market volatilities on Erasca and Compass 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 Erasca with a short position of Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erasca and Compass Therapeutics.
Diversification Opportunities for Erasca and Compass Therapeutics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Erasca and Compass is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Erasca Inc and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics 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 Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of Erasca i.e., Erasca and Compass Therapeutics go up and down completely randomly.
Pair Corralation between Erasca and Compass Therapeutics
Given the investment horizon of 90 days Erasca Inc is expected to generate 0.76 times more return on investment than Compass Therapeutics. However, Erasca Inc is 1.32 times less risky than Compass Therapeutics. It trades about 0.14 of its potential returns per unit of risk. Compass Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 259.00 in Erasca Inc on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Erasca Inc or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erasca Inc vs. Compass Therapeutics
Performance |
| Timeline |
| Erasca Inc |
| Compass Therapeutics |
Erasca and Compass Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erasca and Compass Therapeutics
The main advantage of trading using opposite Erasca and Compass Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erasca position performs unexpectedly, Compass 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 Compass Therapeutics will offset losses from the drop in Compass Therapeutics' long position.| Erasca vs. Century Therapeutics | Erasca vs. Keros Therapeutics | Erasca vs. Monte Rosa Therapeutics | Erasca vs. Design Therapeutics |
| Compass Therapeutics vs. Ideaya Biosciences | Compass Therapeutics vs. AnaptysBio | Compass Therapeutics vs. MeiraGTx Holdings PLC | Compass Therapeutics vs. Keros 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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