Correlation Between RAPT Therapeutics and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both RAPT Therapeutics and NewAmsterdam Pharma 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 RAPT Therapeutics and NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RAPT Therapeutics and NewAmsterdam Pharma, you can compare the effects of market volatilities on RAPT Therapeutics and NewAmsterdam Pharma 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 RAPT Therapeutics with a short position of NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of RAPT Therapeutics and NewAmsterdam Pharma.
Diversification Opportunities for RAPT Therapeutics and NewAmsterdam Pharma
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RAPT and NewAmsterdam is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RAPT Therapeutics and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma and RAPT 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 RAPT Therapeutics are associated (or correlated) with NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of RAPT Therapeutics i.e., RAPT Therapeutics and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between RAPT Therapeutics and NewAmsterdam Pharma
Given the investment horizon of 90 days RAPT Therapeutics is expected to generate 1.03 times more return on investment than NewAmsterdam Pharma. However, RAPT Therapeutics is 1.03 times more volatile than NewAmsterdam Pharma. It trades about 0.0 of its potential returns per unit of risk. NewAmsterdam Pharma is currently generating about -0.37 per unit of risk. If you would invest 116.00 in RAPT Therapeutics on November 28, 2024 and sell it today you would lose (1.00) from holding RAPT Therapeutics or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RAPT Therapeutics vs. NewAmsterdam Pharma
Performance |
| Timeline |
| RAPT Therapeutics |
| NewAmsterdam Pharma |
RAPT Therapeutics and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RAPT Therapeutics and NewAmsterdam Pharma
The main advantage of trading using opposite RAPT Therapeutics and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RAPT Therapeutics position performs unexpectedly, NewAmsterdam Pharma 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 NewAmsterdam Pharma will offset losses from the drop in NewAmsterdam Pharma's long position.| RAPT Therapeutics vs. Connect Biopharma Holdings | RAPT Therapeutics vs. Tyra Biosciences | RAPT Therapeutics vs. Xilio Development | RAPT Therapeutics vs. Mineralys Therapeutics, Common |
| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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