Correlation Between Cue Biopharma and Applied Therapeutics

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

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

Diversification Opportunities for Cue Biopharma and Applied Therapeutics

0.03

Correlation Coefficient

Cue Biopharma  Applied Therapeutics

Significant diversification

The 3 months correlation between Cue and Applied is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and Applied Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Therapeutics 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 Applied Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Therapeutics has no effect on the direction of Cue Biopharma i.e., Cue Biopharma and Applied Therapeutics go up and down completely randomly.

Pair Corralation between Cue Biopharma and Applied Therapeutics

Considering the 90-day investment horizon Cue Biopharma is expected to under-perform the Applied Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Cue Biopharma is 4.67 times less risky than Applied Therapeutics. The stock trades about -0.07 of its potential returns per unit of risk. The Applied Therapeutics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Applied Therapeutics on August 15, 2025 and sell it today you would earn a total of  43.00  from holding Applied Therapeutics or generate 89.58% return on investment over 90 days.

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

Cue Biopharma  vs.  Applied Therapeutics

Cue Biopharma

Risk-Adjusted Performance

Weakest

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

Applied Therapeutics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Applied Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cue Biopharma and Applied Therapeutics

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

The idea behind Cue Biopharma and Applied Therapeutics 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.