Correlation Between Pasithea Therapeutics and Erasca
Can any of the company-specific risk be diversified away by investing in both Pasithea 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 Pasithea Therapeutics and Erasca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pasithea Therapeutics Corp and Erasca Inc, you can compare the effects of market volatilities on Pasithea 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 Pasithea Therapeutics with a short position of Erasca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Erasca.
Diversification Opportunities for Pasithea Therapeutics and Erasca
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pasithea and Erasca is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Erasca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erasca Inc and Pasithea 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 Pasithea Therapeutics Corp 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 Pasithea Therapeutics i.e., Pasithea Therapeutics and Erasca go up and down completely randomly.
Pair Corralation between Pasithea Therapeutics and Erasca
Given the investment horizon of 90 days Pasithea Therapeutics Corp is expected to under-perform the Erasca. In addition to that, Pasithea Therapeutics is 1.55 times more volatile than Erasca Inc. It trades about -0.03 of its total potential returns per unit of risk. Erasca Inc is currently generating about -0.01 per unit of volatility. If you would invest 278.00 in Erasca Inc on December 12, 2024 and sell it today you would lose (126.50) from holding Erasca Inc or give up 45.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pasithea Therapeutics Corp vs. Erasca Inc
Performance |
| Timeline |
| Pasithea Therapeutics |
| Erasca Inc |
Pasithea Therapeutics and Erasca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pasithea Therapeutics and Erasca
The main advantage of trading using opposite Pasithea Therapeutics and Erasca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pasithea 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.| Pasithea Therapeutics vs. Nutriband Warrant | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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