Correlation Between Cue Biopharma and ImmuCell

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

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

Diversification Opportunities for Cue Biopharma and ImmuCell

0.68

Correlation Coefficient

Cue Biopharma  ImmuCell

Poor diversification

The 3 months correlation between Cue and ImmuCell is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell 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 ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and ImmuCell go up and down completely randomly.

Pair Corralation between Cue Biopharma and ImmuCell

Considering the 90-day investment horizon Cue Biopharma is expected to generate 2.12 times more return on investment than ImmuCell. However, Cue Biopharma is 2.12 times more volatile than ImmuCell. It trades about 0.03 of its potential returns per unit of risk. ImmuCell is currently generating about 0.02 per unit of risk. If you would invest  102.00  in Cue Biopharma on December 28, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Cue Biopharma  vs.  ImmuCell

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.

ImmuCell

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ImmuCell is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cue Biopharma and ImmuCell

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

The idea behind Cue Biopharma and ImmuCell 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.