Correlation Between RAPT Therapeutics and Solid Biosciences

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

By analyzing existing cross correlation between RAPT Therapeutics and Solid Biosciences LLC, you can compare the effects of market volatilities on RAPT Therapeutics and Solid Biosciences 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 Solid Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of RAPT Therapeutics and Solid Biosciences.

Diversification Opportunities for RAPT Therapeutics and Solid Biosciences

-0.21

Correlation Coefficient

RAPT Therapeutics  Solid Biosciences

Very good diversification

The 3 months correlation between RAPT and Solid is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding RAPT Therapeutics and Solid Biosciences LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Biosciences LLC 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 Solid Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Biosciences LLC has no effect on the direction of RAPT Therapeutics i.e., RAPT Therapeutics and Solid Biosciences go up and down completely randomly.

Pair Corralation between RAPT Therapeutics and Solid Biosciences

Given the investment horizon of 90 days RAPT Therapeutics is expected to generate 0.98 times more return on investment than Solid Biosciences. However, RAPT Therapeutics is 1.02 times less risky than Solid Biosciences. It trades about 0.31 of its potential returns per unit of risk. Solid Biosciences LLC is currently generating about -0.02 per unit of risk. If you would invest  1,129  in RAPT Therapeutics on August 26, 2025 and sell it today you would earn a total of  1,579  from holding RAPT Therapeutics or generate 139.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.77%
Values	Daily Returns

RAPT Therapeutics  vs.  Solid Biosciences LLC

RAPT Therapeutics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RAPT Therapeutics are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, RAPT Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Solid Biosciences LLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Solid Biosciences LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Solid Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RAPT Therapeutics and Solid Biosciences

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

The idea behind RAPT Therapeutics and Solid Biosciences LLC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.