Correlation Between Cue Biopharma and AbbVie
Can any of the company-specific risk be diversified away by investing in both Cue Biopharma and AbbVie 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 AbbVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cue Biopharma and AbbVie Inc, you can compare the effects of market volatilities on Cue Biopharma and AbbVie 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 AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cue Biopharma and AbbVie.
Diversification Opportunities for Cue Biopharma and AbbVie
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cue and AbbVie is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc 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 AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and AbbVie go up and down completely randomly.
Pair Corralation between Cue Biopharma and AbbVie
Considering the 90-day investment horizon Cue Biopharma is expected to under-perform the AbbVie. In addition to that, Cue Biopharma is 2.55 times more volatile than AbbVie Inc. It trades about -0.13 of its total potential returns per unit of risk. AbbVie Inc is currently generating about -0.15 per unit of volatility. If you would invest 20,387 in AbbVie Inc on September 1, 2024 and sell it today you would lose (2,094) from holding AbbVie Inc or give up 10.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cue Biopharma vs. AbbVie Inc
Performance |
| Timeline |
| Cue Biopharma |
| AbbVie Inc |
Cue Biopharma and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cue Biopharma and AbbVie
The main advantage of trading using opposite Cue Biopharma and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cue Biopharma position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| Cue Biopharma vs. Tff Pharmaceuticals | Cue Biopharma vs. Eliem Therapeutics | Cue Biopharma vs. Inhibrx | Cue Biopharma vs. Enliven Therapeutics |
| AbbVie vs. Tff Pharmaceuticals | AbbVie vs. Eliem Therapeutics | AbbVie vs. Inhibrx | AbbVie vs. Enliven 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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