Correlation Between Beam Therapeutics and Cue Biopharma
Can any of the company-specific risk be diversified away by investing in both Beam Therapeutics 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 Beam Therapeutics and Cue Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Therapeutics and Cue Biopharma, you can compare the effects of market volatilities on Beam Therapeutics 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 Beam Therapeutics with a short position of Cue Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Therapeutics and Cue Biopharma.
Diversification Opportunities for Beam Therapeutics and Cue Biopharma
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Beam and Cue is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Cue Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cue Biopharma and Beam 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 Beam Therapeutics 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 Beam Therapeutics i.e., Beam Therapeutics and Cue Biopharma go up and down completely randomly.
Pair Corralation between Beam Therapeutics and Cue Biopharma
Given the investment horizon of 90 days Beam Therapeutics is expected to generate 4.05 times less return on investment than Cue Biopharma. But when comparing it to its historical volatility, Beam Therapeutics is 1.93 times less risky than Cue Biopharma. It trades about 0.04 of its potential returns per unit of risk. Cue Biopharma is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Cue Biopharma on November 30, 2024 and sell it today you would earn a total of 21.00 from holding Cue Biopharma or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Therapeutics vs. Cue Biopharma
Performance |
| Timeline |
| Beam Therapeutics |
| Cue Biopharma |
Beam Therapeutics and Cue Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Therapeutics and Cue Biopharma
The main advantage of trading using opposite Beam Therapeutics and Cue Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Therapeutics 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.| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
| Cue Biopharma vs. Beam Therapeutics | Cue Biopharma vs. Editas Medicine | Cue Biopharma vs. Caribou Biosciences | Cue Biopharma vs. Verve Therapeutics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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