Correlation Between AIM ImmunoTech and Armata Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both AIM ImmunoTech and Armata Pharmaceuticals 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 AIM ImmunoTech and Armata Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AIM ImmunoTech and Armata Pharmaceuticals

0.25

Correlation Coefficient

AIM ImmunoTech  Armata Pharmaceuticals

Modest diversification

The 3 months correlation between AIM and Armata is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and AIM ImmunoTech 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 AIM ImmunoTech are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Armata Pharmaceuticals go up and down completely randomly.

Pair Corralation between AIM ImmunoTech and Armata Pharmaceuticals

Considering the 90-day investment horizon AIM ImmunoTech is expected to under-perform the Armata Pharmaceuticals. In addition to that, AIM ImmunoTech is 1.11 times more volatile than Armata Pharmaceuticals. It trades about -0.1 of its total potential returns per unit of risk. Armata Pharmaceuticals is currently generating about 0.01 per unit of volatility. If you would invest  240.00  in Armata Pharmaceuticals on September 3, 2024 and sell it today you would lose (10.00) from holding Armata Pharmaceuticals or give up 4.17% of portfolio value over 90 days.

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

AIM ImmunoTech  vs.  Armata Pharmaceuticals

AIM ImmunoTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIM ImmunoTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Armata Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armata Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Armata Pharmaceuticals is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AIM ImmunoTech and Armata Pharmaceuticals

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

The idea behind AIM ImmunoTech and Armata Pharmaceuticals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.