Correlation Between Cue Biopharma and Affimed NV

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Can any of the company-specific risk be diversified away by investing in both Cue Biopharma and Affimed NV 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 Affimed NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cue Biopharma and Affimed NV, you can compare the effects of market volatilities on Cue Biopharma and Affimed NV 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 Affimed NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cue Biopharma and Affimed NV.

Diversification Opportunities for Cue Biopharma and Affimed NV

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cue and Affimed is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and Affimed NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affimed NV 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 Affimed NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affimed NV has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and Affimed NV go up and down completely randomly.

Pair Corralation between Cue Biopharma and Affimed NV

Considering the 90-day investment horizon Cue Biopharma is expected to under-perform the Affimed NV. In addition to that, Cue Biopharma is 1.35 times more volatile than Affimed NV. It trades about -0.09 of its total potential returns per unit of risk. Affimed NV is currently generating about -0.09 per unit of volatility. If you would invest  327.00  in Affimed NV on September 3, 2024 and sell it today you would lose (43.00) from holding Affimed NV or give up 13.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cue Biopharma  vs.  Affimed NV

 Performance 
       Timeline  
Cue Biopharma 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
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 unsteady basic indicators, Cue Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.
Affimed NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Affimed NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cue Biopharma and Affimed NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cue Biopharma and Affimed NV

The main advantage of trading using opposite Cue Biopharma and Affimed NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cue Biopharma position performs unexpectedly, Affimed NV 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 Affimed NV will offset losses from the drop in Affimed NV's long position.
The idea behind Cue Biopharma and Affimed NV 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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