Correlation Between Century Therapeutics and Erasca
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Erasca 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 Century Therapeutics and Erasca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Erasca Inc, you can compare the effects of market volatilities on Century Therapeutics and Erasca 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 Century Therapeutics with a short position of Erasca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Erasca.
Diversification Opportunities for Century Therapeutics and Erasca
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Century and Erasca is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Erasca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erasca Inc and Century Therapeutics 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 Century Therapeutics are associated (or correlated) with Erasca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erasca Inc has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Erasca go up and down completely randomly.
Pair Corralation between Century Therapeutics and Erasca
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Erasca. In addition to that, Century Therapeutics is 1.12 times more volatile than Erasca Inc. It trades about -0.11 of its total potential returns per unit of risk. Erasca Inc is currently generating about -0.06 per unit of volatility. If you would invest 274.00 in Erasca Inc on November 2, 2024 and sell it today you would lose (86.00) from holding Erasca Inc or give up 31.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Erasca Inc
Performance |
| Timeline |
| Century Therapeutics |
| Erasca Inc |
Century Therapeutics and Erasca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Erasca
The main advantage of trading using opposite Century Therapeutics and Erasca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Erasca 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 Erasca will offset losses from the drop in Erasca's long position.| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
| Erasca vs. Century Therapeutics | Erasca vs. Keros Therapeutics | Erasca vs. Monte Rosa Therapeutics | Erasca vs. Design 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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