Correlation Between Alphabet and Compass Therapeutics

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

By analyzing existing cross correlation between Alphabet Inc Class C and Compass Therapeutics, you can compare the effects of market volatilities on Alphabet and Compass 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 Alphabet with a short position of Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Compass Therapeutics.

Diversification Opportunities for Alphabet and Compass Therapeutics

0.74

Correlation Coefficient

Alphabet  Compass Therapeutics

Poor diversification

The 3 months correlation between Alphabet and Compass is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of Alphabet i.e., Alphabet and Compass Therapeutics go up and down completely randomly.

Pair Corralation between Alphabet and Compass Therapeutics

Given the investment horizon of 90 days Alphabet is expected to generate 1.69 times less return on investment than Compass Therapeutics. But when comparing it to its historical volatility, Alphabet Inc Class C is 2.08 times less risky than Compass Therapeutics. It trades about 0.3 of its potential returns per unit of risk. Compass Therapeutics is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Compass Therapeutics on August 21, 2025 and sell it today you would earn a total of  215.50  from holding Compass Therapeutics or generate 76.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Alphabet Inc Class C  vs.  Compass Therapeutics

Alphabet Class C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Compass Therapeutics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Therapeutics are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Compass Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphabet and Compass Therapeutics

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

The idea behind Alphabet Inc Class C and Compass 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 CEOs Directory module to screen CEOs from public companies around the world.