Correlation Between Erasca and Shattuck Labs

Can any of the company-specific risk be diversified away by investing in both Erasca and Shattuck Labs 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 Shattuck Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Erasca Inc and Shattuck Labs, you can compare the effects of market volatilities on Erasca and Shattuck Labs 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 Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erasca and Shattuck Labs.

Diversification Opportunities for Erasca and Shattuck Labs

0.03

Correlation Coefficient

Erasca  Shattuck Labs

Significant diversification

The 3 months correlation between Erasca and Shattuck is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Erasca Inc and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs 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 Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Erasca i.e., Erasca and Shattuck Labs go up and down completely randomly.

Pair Corralation between Erasca and Shattuck Labs

Given the investment horizon of 90 days Erasca is expected to generate 21.48 times less return on investment than Shattuck Labs. But when comparing it to its historical volatility, Erasca Inc is 1.94 times less risky than Shattuck Labs. It trades about 0.0 of its potential returns per unit of risk. Shattuck Labs is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Shattuck Labs on September 18, 2024 and sell it today you would lose (126.00) from holding Shattuck Labs or give up 52.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Erasca Inc  vs.  Shattuck Labs

Erasca Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Erasca Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Shattuck Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shattuck Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Erasca and Shattuck Labs

The main advantage of trading using opposite Erasca and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erasca position performs unexpectedly, Shattuck Labs 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 Shattuck Labs will offset losses from the drop in Shattuck Labs' long position.

The idea behind Erasca Inc and Shattuck Labs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.