Correlation Between Abcam PLC and Cue Biopharma

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

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

Diversification Opportunities for Abcam PLC and Cue Biopharma

0.52

Correlation Coefficient

Abcam PLC  Cue Biopharma

Very weak diversification

The 3 months correlation between Abcam and Cue is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Abcam PLC and Cue Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cue Biopharma and Abcam PLC 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 Abcam PLC 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 Abcam PLC i.e., Abcam PLC and Cue Biopharma go up and down completely randomly.

Pair Corralation between Abcam PLC and Cue Biopharma

If you would invest  2,359  in Abcam PLC on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Abcam PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Abcam PLC  vs.  Cue Biopharma

Abcam PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abcam PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Abcam PLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 conflicting basic indicators, Cue Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abcam PLC and Cue Biopharma

The main advantage of trading using opposite Abcam PLC and Cue Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abcam PLC 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 Abcam PLC 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..