Correlation Between AIM ImmunoTech and Biocardia

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

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

Diversification Opportunities for AIM ImmunoTech and Biocardia

-0.55

Correlation Coefficient

AIM ImmunoTech  Biocardia

Excellent diversification

The 3 months correlation between AIM and Biocardia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia 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 Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Biocardia go up and down completely randomly.

Pair Corralation between AIM ImmunoTech and Biocardia

Considering the 90-day investment horizon AIM ImmunoTech is expected to under-perform the Biocardia. In addition to that, AIM ImmunoTech is 1.11 times more volatile than Biocardia. It trades about -0.09 of its total potential returns per unit of risk. Biocardia is currently generating about 0.13 per unit of volatility. If you would invest  184.00  in Biocardia on December 19, 2024 and sell it today you would earn a total of  82.00  from holding Biocardia or generate 44.57% return on investment over 90 days.

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

AIM ImmunoTech  vs.  Biocardia

AIM ImmunoTech

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Biocardia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biocardia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Biocardia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIM ImmunoTech and Biocardia

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

The idea behind AIM ImmunoTech and Biocardia 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.