Correlation Between Compass Therapeutics and RAPT Therapeutics

Can any of the company-specific risk be diversified away by investing in both Compass 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 Compass 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 Compass Therapeutics and RAPT Therapeutics, you can compare the effects of market volatilities on Compass 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 Compass Therapeutics with a short position of RAPT Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Therapeutics and RAPT Therapeutics.

Diversification Opportunities for Compass Therapeutics and RAPT Therapeutics

0.9

Correlation Coefficient

Compass Therapeutics  RAPT Therapeutics

Almost no diversification

The 3 months correlation between Compass and RAPT is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Compass Therapeutics and RAPT Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAPT Therapeutics and Compass 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 Compass Therapeutics 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 Compass Therapeutics i.e., Compass Therapeutics and RAPT Therapeutics go up and down completely randomly.

Pair Corralation between Compass Therapeutics and RAPT Therapeutics

Given the investment horizon of 90 days Compass Therapeutics is expected to generate 3.11 times less return on investment than RAPT Therapeutics. But when comparing it to its historical volatility, Compass Therapeutics is 2.4 times less risky than RAPT Therapeutics. It trades about 0.13 of its potential returns per unit of risk. RAPT Therapeutics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,832  in RAPT Therapeutics on November 19, 2025 and sell it today you would earn a total of  2,940  from holding RAPT Therapeutics or generate 103.81% return on investment over 90 days.

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

Compass Therapeutics  vs.  RAPT Therapeutics

Compass Therapeutics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Compass Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

RAPT Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RAPT Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, RAPT Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compass Therapeutics and RAPT Therapeutics

The main advantage of trading using opposite Compass Therapeutics and RAPT Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass 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.

The idea behind Compass Therapeutics and RAPT Therapeutics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.