Correlation Between Inventiva and Erasca
Can any of the company-specific risk be diversified away by investing in both Inventiva 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 Inventiva and Erasca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and Erasca Inc, you can compare the effects of market volatilities on Inventiva 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 Inventiva with a short position of Erasca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Erasca.
Diversification Opportunities for Inventiva and Erasca
Weak diversification
The 3 months correlation between Inventiva and Erasca is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Erasca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erasca Inc and Inventiva 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 Inventiva Sa 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 Inventiva i.e., Inventiva and Erasca go up and down completely randomly.
Pair Corralation between Inventiva and Erasca
Considering the 90-day investment horizon Inventiva Sa is expected to generate 1.11 times more return on investment than Erasca. However, Inventiva is 1.11 times more volatile than Erasca Inc. It trades about 0.0 of its potential returns per unit of risk. Erasca Inc is currently generating about -0.02 per unit of risk. If you would invest 428.00 in Inventiva Sa on August 29, 2024 and sell it today you would lose (164.00) from holding Inventiva Sa or give up 38.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva Sa vs. Erasca Inc
Performance |
| Timeline |
| Inventiva Sa |
| Erasca Inc |
Inventiva and Erasca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and Erasca
The main advantage of trading using opposite Inventiva and Erasca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva 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.| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Eliem Therapeutics | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux Therapeutics |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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