Correlation Between Cue Biopharma and Humacyte

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

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

Diversification Opportunities for Cue Biopharma and Humacyte

0.34

Correlation Coefficient

Cue Biopharma  Humacyte

Weak diversification

The 3 months correlation between Cue and Humacyte is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and Humacyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humacyte 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 Humacyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humacyte has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and Humacyte go up and down completely randomly.

Pair Corralation between Cue Biopharma and Humacyte

Considering the 90-day investment horizon Cue Biopharma is expected to under-perform the Humacyte. In addition to that, Cue Biopharma is 1.58 times more volatile than Humacyte. It trades about -0.17 of its total potential returns per unit of risk. Humacyte is currently generating about -0.18 per unit of volatility. If you would invest  184.00  in Humacyte on August 31, 2024 and sell it today you would lose (37.00) from holding Humacyte or give up 20.11% of portfolio value over 90 days.

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

Cue Biopharma  vs.  Humacyte

Cue Biopharma

Risk-Adjusted Performance

10 of 100

OK

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

Humacyte

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Humacyte are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Humacyte may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Cue Biopharma and Humacyte

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

The idea behind Cue Biopharma and Humacyte 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.