Correlation Between Erasca and Kura Oncology
Can any of the company-specific risk be diversified away by investing in both Erasca and Kura Oncology 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 Kura Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erasca Inc and Kura Oncology, you can compare the effects of market volatilities on Erasca and Kura Oncology 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 Kura Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erasca and Kura Oncology.
Diversification Opportunities for Erasca and Kura Oncology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erasca and Kura is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Erasca Inc and Kura Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Oncology 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 Kura Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Oncology has no effect on the direction of Erasca i.e., Erasca and Kura Oncology go up and down completely randomly.
Pair Corralation between Erasca and Kura Oncology
Given the investment horizon of 90 days Erasca Inc is expected to generate 0.46 times more return on investment than Kura Oncology. However, Erasca Inc is 2.16 times less risky than Kura Oncology. It trades about 0.08 of its potential returns per unit of risk. Kura Oncology is currently generating about -0.21 per unit of risk. If you would invest 264.00 in Erasca Inc on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Erasca Inc or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erasca Inc vs. Kura Oncology
Performance |
| Timeline |
| Erasca Inc |
| Kura Oncology |
Erasca and Kura Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erasca and Kura Oncology
The main advantage of trading using opposite Erasca and Kura Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erasca position performs unexpectedly, Kura Oncology 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 Kura Oncology will offset losses from the drop in Kura Oncology's long position.| Erasca vs. Eliem Therapeutics | Erasca vs. Scpharmaceuticals | Erasca vs. Milestone Pharmaceuticals | Erasca vs. Seres Therapeutics |
| Kura Oncology vs. Eliem Therapeutics | Kura Oncology vs. Scpharmaceuticals | Kura Oncology vs. Milestone Pharmaceuticals | Kura Oncology vs. Seres 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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