Correlation Between Armata Pharmaceuticals and ImmuCell

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

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

Diversification Opportunities for Armata Pharmaceuticals and ImmuCell

0.09

Correlation Coefficient

Armata Pharmaceuticals  ImmuCell

Significant diversification

The 3 months correlation between Armata and ImmuCell is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell 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 ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and ImmuCell go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and ImmuCell

Given the investment horizon of 90 days Armata Pharmaceuticals is expected to generate 4.3 times less return on investment than ImmuCell. In addition to that, Armata Pharmaceuticals is 2.06 times more volatile than ImmuCell. It trades about 0.01 of its total potential returns per unit of risk. ImmuCell is currently generating about 0.07 per unit of volatility. If you would invest  377.00  in ImmuCell on September 3, 2024 and sell it today you would earn a total of  35.00  from holding ImmuCell or generate 9.28% return on investment over 90 days.

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

Armata Pharmaceuticals  vs.  ImmuCell

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.

ImmuCell

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Armata Pharmaceuticals and ImmuCell

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

The idea behind Armata Pharmaceuticals and ImmuCell 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.