Correlation Between Armata Pharmaceuticals and AIM ImmunoTech

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

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

Diversification Opportunities for Armata Pharmaceuticals and AIM ImmunoTech

0.29

Correlation Coefficient

Armata Pharmaceuticals  AIM ImmunoTech

Modest diversification

The 3 months correlation between Armata and AIM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech and Armata Pharmaceuticals 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 Armata Pharmaceuticals are associated (or correlated) with AIM ImmunoTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ImmunoTech has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and AIM ImmunoTech go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and AIM ImmunoTech

Given the investment horizon of 90 days Armata Pharmaceuticals is expected to generate 0.51 times more return on investment than AIM ImmunoTech. However, Armata Pharmaceuticals is 1.95 times less risky than AIM ImmunoTech. It trades about 0.04 of its potential returns per unit of risk. AIM ImmunoTech is currently generating about -0.1 per unit of risk. If you would invest  195.00  in Armata Pharmaceuticals on December 18, 2024 and sell it today you would earn a total of  10.00  from holding Armata Pharmaceuticals or generate 5.13% return on investment over 90 days.

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

Armata Pharmaceuticals  vs.  AIM ImmunoTech

Armata Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Armata Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal primary indicators, Armata Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Armata Pharmaceuticals and AIM ImmunoTech

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

The idea behind Armata Pharmaceuticals and AIM ImmunoTech 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.