Correlation Between Mustang Bio and Cue Biopharma

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

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

Diversification Opportunities for Mustang Bio and Cue Biopharma

0.54

Correlation Coefficient

Mustang Bio  Cue Biopharma

Very weak diversification

The 3 months correlation between Mustang and Cue is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mustang Bio and Cue Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cue Biopharma and Mustang Bio 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 Mustang Bio 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 Mustang Bio i.e., Mustang Bio and Cue Biopharma go up and down completely randomly.

Pair Corralation between Mustang Bio and Cue Biopharma

Given the investment horizon of 90 days Mustang Bio is expected to generate 4.81 times more return on investment than Cue Biopharma. However, Mustang Bio is 4.81 times more volatile than Cue Biopharma. It trades about 0.09 of its potential returns per unit of risk. Cue Biopharma is currently generating about 0.02 per unit of risk. If you would invest  114.00  in Mustang Bio on May 6, 2025 and sell it today you would earn a total of  33.00  from holding Mustang Bio or generate 28.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Mustang Bio  vs.  Cue Biopharma

Mustang Bio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mustang Bio are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Mustang Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Cue Biopharma

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cue Biopharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Cue Biopharma may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mustang Bio and Cue Biopharma

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

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.