Correlation Between AIM ImmunoTech and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both AIM ImmunoTech and Veolia Environnement 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 Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ImmunoTech and Veolia Environnement VE, you can compare the effects of market volatilities on AIM ImmunoTech and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ImmunoTech and Veolia Environnement.
Diversification Opportunities for AIM ImmunoTech and Veolia Environnement
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AIM and Veolia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Veolia Environnement go up and down completely randomly.
Pair Corralation between AIM ImmunoTech and Veolia Environnement
Assuming the 90 days trading horizon AIM ImmunoTech is expected to generate 6.19 times more return on investment than Veolia Environnement. However, AIM ImmunoTech is 6.19 times more volatile than Veolia Environnement VE. It trades about 0.01 of its potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.11 per unit of risk. If you would invest 24.00 in AIM ImmunoTech on September 12, 2024 and sell it today you would lose (1.00) from holding AIM ImmunoTech or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
AIM ImmunoTech vs. Veolia Environnement VE
Performance |
| Timeline |
| AIM ImmunoTech |
| Veolia Environnement |
AIM ImmunoTech and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ImmunoTech and Veolia Environnement
The main advantage of trading using opposite AIM ImmunoTech and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ImmunoTech position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| AIM ImmunoTech vs. Zoom Video Communications | AIM ImmunoTech vs. Neometals | AIM ImmunoTech vs. Coor Service Management | AIM ImmunoTech vs. Fidelity Sustainable USD |
| Veolia Environnement vs. Solstad Offshore ASA | Veolia Environnement vs. Bisichi Mining PLC | Veolia Environnement vs. Fresenius Medical Care | Veolia Environnement vs. Creo Medical Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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