Correlation Between AIM ImmunoTech and Aptorum Group

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

By analyzing existing cross correlation between AIM ImmunoTech and Aptorum Group Ltd, you can compare the effects of market volatilities on AIM ImmunoTech and Aptorum Group 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 Aptorum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ImmunoTech and Aptorum Group.

Diversification Opportunities for AIM ImmunoTech and Aptorum Group

0.62

Correlation Coefficient

AIM ImmunoTech  Aptorum Group

Poor diversification

The 3 months correlation between AIM and Aptorum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Aptorum Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptorum Group 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 Aptorum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptorum Group has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Aptorum Group go up and down completely randomly.

Pair Corralation between AIM ImmunoTech and Aptorum Group

Considering the 90-day investment horizon AIM ImmunoTech is expected to under-perform the Aptorum Group. But the stock apears to be less risky and, when comparing its historical volatility, AIM ImmunoTech is 3.66 times less risky than Aptorum Group. The stock trades about -0.01 of its potential returns per unit of risk. The Aptorum Group Ltd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Aptorum Group Ltd on October 7, 2024 and sell it today you would earn a total of  81.00  from holding Aptorum Group Ltd or generate 60.9% return on investment over 90 days.

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

AIM ImmunoTech  vs.  Aptorum Group Ltd

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 latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aptorum Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIM ImmunoTech and Aptorum Group

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

The idea behind AIM ImmunoTech and Aptorum Group Ltd 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.