Correlation Between Cue Biopharma and BioNTech

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

By analyzing existing cross correlation between Cue Biopharma and BioNTech SE, you can compare the effects of market volatilities on Cue Biopharma and BioNTech 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 Cue Biopharma with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cue Biopharma and BioNTech.

Diversification Opportunities for Cue Biopharma and BioNTech

0.82

Correlation Coefficient

Cue Biopharma  BioNTech

Very poor diversification

The 3 months correlation between Cue and BioNTech is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Cue Biopharma 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 Cue Biopharma are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and BioNTech go up and down completely randomly.

Pair Corralation between Cue Biopharma and BioNTech

Considering the 90-day investment horizon Cue Biopharma is expected to generate 2.12 times more return on investment than BioNTech. However, Cue Biopharma is 2.12 times more volatile than BioNTech SE. It trades about 0.03 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.07 per unit of risk. If you would invest  102.00  in Cue Biopharma on December 29, 2024 and sell it today you would lose (2.00) from holding Cue Biopharma or give up 1.96% of portfolio value over 90 days.

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

Cue Biopharma  vs.  BioNTech SE

Cue Biopharma

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cue Biopharma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Cue Biopharma may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cue Biopharma and BioNTech

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

The idea behind Cue Biopharma and BioNTech SE 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.