Correlation Between Erasca and Verastem
Can any of the company-specific risk be diversified away by investing in both Erasca and Verastem 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 Verastem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erasca Inc and Verastem, you can compare the effects of market volatilities on Erasca and Verastem 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 Verastem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erasca and Verastem.
Diversification Opportunities for Erasca and Verastem
Very good diversification
The 3 months correlation between Erasca and Verastem is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Erasca Inc and Verastem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verastem 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 Verastem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verastem has no effect on the direction of Erasca i.e., Erasca and Verastem go up and down completely randomly.
Pair Corralation between Erasca and Verastem
Given the investment horizon of 90 days Erasca Inc is expected to generate 0.91 times more return on investment than Verastem. However, Erasca Inc is 1.1 times less risky than Verastem. It trades about 0.22 of its potential returns per unit of risk. Verastem is currently generating about 0.05 per unit of risk. If you would invest 150.00 in Erasca Inc on August 21, 2025 and sell it today you would earn a total of 126.00 from holding Erasca Inc or generate 84.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erasca Inc vs. Verastem
Performance |
| Timeline |
| Erasca Inc |
| Verastem |
Erasca and Verastem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erasca and Verastem
The main advantage of trading using opposite Erasca and Verastem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erasca position performs unexpectedly, Verastem 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 Verastem will offset losses from the drop in Verastem's long position.| Erasca vs. Astria Therapeutics | Erasca vs. ArriVent BioPharma, Common | Erasca vs. MoonLake Immunotherapeutics | Erasca vs. Iovance Biotherapeutics |
| Verastem vs. Regenxbio | Verastem vs. Absci Corp | Verastem vs. MoonLake Immunotherapeutics | Verastem vs. Kalvista Pharmaceuticals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |