Correlation Between Kymera Therapeutics and Erasca
Can any of the company-specific risk be diversified away by investing in both Kymera 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 Kymera Therapeutics and Erasca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kymera Therapeutics and Erasca Inc, you can compare the effects of market volatilities on Kymera 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 Kymera Therapeutics with a short position of Erasca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kymera Therapeutics and Erasca.
Diversification Opportunities for Kymera Therapeutics and Erasca
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kymera and Erasca is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kymera Therapeutics and Erasca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erasca Inc and Kymera 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 Kymera 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 Kymera Therapeutics i.e., Kymera Therapeutics and Erasca go up and down completely randomly.
Pair Corralation between Kymera Therapeutics and Erasca
Given the investment horizon of 90 days Kymera Therapeutics is expected to generate 4.53 times less return on investment than Erasca. But when comparing it to its historical volatility, Kymera Therapeutics is 1.18 times less risky than Erasca. It trades about 0.04 of its potential returns per unit of risk. Erasca Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kymera Therapeutics vs. Erasca Inc
Performance |
| Timeline |
| Kymera Therapeutics |
| Erasca Inc |
Kymera Therapeutics and Erasca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kymera Therapeutics and Erasca
The main advantage of trading using opposite Kymera Therapeutics and Erasca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kymera 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.| Kymera Therapeutics vs. Foghorn Therapeutics | Kymera Therapeutics vs. Shattuck Labs | Kymera Therapeutics vs. Monte Rosa Therapeutics | Kymera Therapeutics vs. Nurix 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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