Correlation Between AIM ImmunoTech and DG Innovate
Can any of the company-specific risk be diversified away by investing in both AIM ImmunoTech and DG Innovate 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 DG Innovate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ImmunoTech and DG Innovate PLC, you can compare the effects of market volatilities on AIM ImmunoTech and DG Innovate 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 DG Innovate. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ImmunoTech and DG Innovate.
Diversification Opportunities for AIM ImmunoTech and DG Innovate
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIM and DGI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and DG Innovate PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DG Innovate PLC 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 DG Innovate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DG Innovate PLC has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and DG Innovate go up and down completely randomly.
Pair Corralation between AIM ImmunoTech and DG Innovate
Assuming the 90 days trading horizon AIM ImmunoTech is expected to under-perform the DG Innovate. But the stock apears to be less risky and, when comparing its historical volatility, AIM ImmunoTech is 1.15 times less risky than DG Innovate. The stock trades about -0.12 of its potential returns per unit of risk. The DG Innovate PLC is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6.30 in DG Innovate PLC on August 30, 2024 and sell it today you would earn a total of 4.70 from holding DG Innovate PLC or generate 74.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
AIM ImmunoTech vs. DG Innovate PLC
Performance |
| Timeline |
| AIM ImmunoTech |
| DG Innovate PLC |
AIM ImmunoTech and DG Innovate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ImmunoTech and DG Innovate
The main advantage of trading using opposite AIM ImmunoTech and DG Innovate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ImmunoTech position performs unexpectedly, DG Innovate 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 DG Innovate will offset losses from the drop in DG Innovate's long position.| AIM ImmunoTech vs. Zoom Video Communications | AIM ImmunoTech vs. Enbridge | AIM ImmunoTech vs. Endo International PLC | AIM ImmunoTech vs. Diversified Energy |
| DG Innovate vs. AIM ImmunoTech | DG Innovate vs. Silvercorp Metals | DG Innovate vs. L3Harris Technologies | DG Innovate vs. Ashtead Technology Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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