Correlation Between 89bio and Cue Biopharma

Can any of the company-specific risk be diversified away by investing in both 89bio and Cue Biopharma 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 89bio and Cue Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 89bio Inc and Cue Biopharma, you can compare the effects of market volatilities on 89bio and Cue Biopharma 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 89bio with a short position of Cue Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of 89bio and Cue Biopharma.

Diversification Opportunities for 89bio and Cue Biopharma

0.24

Correlation Coefficient

89bio  Cue Biopharma

Modest diversification

The 3 months correlation between 89bio and Cue is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding 89bio Inc and Cue Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cue Biopharma and 89bio 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 89bio Inc are associated (or correlated) with Cue Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cue Biopharma has no effect on the direction of 89bio i.e., 89bio and Cue Biopharma go up and down completely randomly.

Pair Corralation between 89bio and Cue Biopharma

Given the investment horizon of 90 days 89bio Inc is expected to generate 0.86 times more return on investment than Cue Biopharma. However, 89bio Inc is 1.16 times less risky than Cue Biopharma. It trades about 0.03 of its potential returns per unit of risk. Cue Biopharma is currently generating about 0.02 per unit of risk. If you would invest  788.00  in 89bio Inc on December 27, 2024 and sell it today you would earn a total of  14.00  from holding 89bio Inc or generate 1.78% return on investment over 90 days.

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

89bio Inc  vs.  Cue Biopharma

89bio Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 89bio Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 89bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Cue Biopharma

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cue Biopharma are ranked lower than 1 (%) 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.

Pair Trading with 89bio and Cue Biopharma

The main advantage of trading using opposite 89bio and Cue Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 89bio position performs unexpectedly, Cue Biopharma 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 Cue Biopharma will offset losses from the drop in Cue Biopharma's long position.

The idea behind 89bio Inc and Cue Biopharma 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..