Correlation Between RAPT Therapeutics and Third Harmonic
Can any of the company-specific risk be diversified away by investing in both RAPT Therapeutics and Third Harmonic 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 Third Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RAPT Therapeutics and Third Harmonic Bio, you can compare the effects of market volatilities on RAPT Therapeutics and Third Harmonic 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 Third Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of RAPT Therapeutics and Third Harmonic.
Diversification Opportunities for RAPT Therapeutics and Third Harmonic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RAPT and Third is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding RAPT Therapeutics and Third Harmonic Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Harmonic Bio 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 Third Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Harmonic Bio has no effect on the direction of RAPT Therapeutics i.e., RAPT Therapeutics and Third Harmonic go up and down completely randomly.
Pair Corralation between RAPT Therapeutics and Third Harmonic
Given the investment horizon of 90 days RAPT Therapeutics is expected to under-perform the Third Harmonic. In addition to that, RAPT Therapeutics is 1.77 times more volatile than Third Harmonic Bio. It trades about -0.06 of its total potential returns per unit of risk. Third Harmonic Bio is currently generating about 0.01 per unit of volatility. If you would invest 1,325 in Third Harmonic Bio on September 12, 2024 and sell it today you would lose (66.00) from holding Third Harmonic Bio or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RAPT Therapeutics vs. Third Harmonic Bio
Performance |
| Timeline |
| RAPT Therapeutics |
| Third Harmonic Bio |
RAPT Therapeutics and Third Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RAPT Therapeutics and Third Harmonic
The main advantage of trading using opposite RAPT Therapeutics and Third Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RAPT Therapeutics position performs unexpectedly, Third Harmonic 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 Third Harmonic will offset losses from the drop in Third Harmonic'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 |
| Third Harmonic vs. Sensei Biotherapeutics | Third Harmonic vs. NextCure | Third Harmonic vs. Nuvation Bio | Third Harmonic vs. Cullinan Oncology LLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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