Correlation Between Smithson Investment and AIM ImmunoTech

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

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

Diversification Opportunities for Smithson Investment and AIM ImmunoTech

-0.68

Correlation Coefficient

Smithson Investment  AIM ImmunoTech

Excellent diversification

The 3 months correlation between Smithson and AIM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Smithson Investment Trust and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech and Smithson Investment 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 Smithson Investment Trust 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 Smithson Investment i.e., Smithson Investment and AIM ImmunoTech go up and down completely randomly.

Pair Corralation between Smithson Investment and AIM ImmunoTech

Assuming the 90 days trading horizon Smithson Investment Trust is expected to under-perform the AIM ImmunoTech. But the stock apears to be less risky and, when comparing its historical volatility, Smithson Investment Trust is 5.96 times less risky than AIM ImmunoTech. The stock trades about -0.18 of its potential returns per unit of risk. The AIM ImmunoTech is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  21.00  in AIM ImmunoTech on October 8, 2024 and sell it today you would earn a total of  1.00  from holding AIM ImmunoTech or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Smithson Investment Trust  vs.  AIM ImmunoTech

Smithson Investment Trust

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Smithson Investment Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Smithson Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Smithson Investment and AIM ImmunoTech

The main advantage of trading using opposite Smithson Investment and AIM ImmunoTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithson Investment 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 Smithson Investment Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.