Correlation Between Corcept Therapeutics and RAPT Therapeutics
Can any of the company-specific risk be diversified away by investing in both Corcept Therapeutics and RAPT Therapeutics 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 Corcept Therapeutics and RAPT Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corcept Therapeutics Incorporated and RAPT Therapeutics, you can compare the effects of market volatilities on Corcept Therapeutics and RAPT Therapeutics 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 Corcept Therapeutics with a short position of RAPT Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corcept Therapeutics and RAPT Therapeutics.
Diversification Opportunities for Corcept Therapeutics and RAPT Therapeutics
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corcept and RAPT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Corcept Therapeutics Incorpora and RAPT Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAPT Therapeutics and Corcept 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 Corcept Therapeutics Incorporated are associated (or correlated) with RAPT Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAPT Therapeutics has no effect on the direction of Corcept Therapeutics i.e., Corcept Therapeutics and RAPT Therapeutics go up and down completely randomly.
Pair Corralation between Corcept Therapeutics and RAPT Therapeutics
Given the investment horizon of 90 days Corcept Therapeutics Incorporated is expected to generate 0.28 times more return on investment than RAPT Therapeutics. However, Corcept Therapeutics Incorporated is 3.57 times less risky than RAPT Therapeutics. It trades about 0.23 of its potential returns per unit of risk. RAPT Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 5,006 in Corcept Therapeutics Incorporated on September 3, 2024 and sell it today you would earn a total of 762.00 from holding Corcept Therapeutics Incorporated or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corcept Therapeutics Incorpora vs. RAPT Therapeutics
Performance |
| Timeline |
| Corcept Therapeutics |
| RAPT Therapeutics |
Corcept Therapeutics and RAPT Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corcept Therapeutics and RAPT Therapeutics
The main advantage of trading using opposite Corcept Therapeutics and RAPT Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corcept Therapeutics position performs unexpectedly, RAPT Therapeutics 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 RAPT Therapeutics will offset losses from the drop in RAPT Therapeutics' long position.| Corcept Therapeutics vs. Ideaya Biosciences | Corcept Therapeutics vs. AnaptysBio | Corcept Therapeutics vs. MeiraGTx Holdings PLC | Corcept Therapeutics vs. Keros Therapeutics |
| RAPT Therapeutics vs. DiaMedica Therapeutics | RAPT Therapeutics vs. Lyra Therapeutics | RAPT Therapeutics vs. Centessa Pharmaceuticals PLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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