Correlation Between Gilead Sciences and AIM ImmunoTech
Can any of the company-specific risk be diversified away by investing in both Gilead Sciences 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 Gilead Sciences and AIM ImmunoTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilead Sciences and AIM ImmunoTech, you can compare the effects of market volatilities on Gilead Sciences 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 Gilead Sciences with a short position of AIM ImmunoTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilead Sciences and AIM ImmunoTech.
Diversification Opportunities for Gilead Sciences and AIM ImmunoTech
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gilead and AIM is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gilead Sciences and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech and Gilead Sciences 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 Gilead Sciences 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 Gilead Sciences i.e., Gilead Sciences and AIM ImmunoTech go up and down completely randomly.
Pair Corralation between Gilead Sciences and AIM ImmunoTech
Given the investment horizon of 90 days Gilead Sciences is expected to generate 1.35 times less return on investment than AIM ImmunoTech. But when comparing it to its historical volatility, Gilead Sciences is 3.98 times less risky than AIM ImmunoTech. It trades about 0.02 of its potential returns per unit of risk. AIM ImmunoTech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 38.00 in AIM ImmunoTech on September 3, 2024 and sell it today you would lose (16.00) from holding AIM ImmunoTech or give up 42.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilead Sciences vs. AIM ImmunoTech
Performance |
| Timeline |
| Gilead Sciences |
| AIM ImmunoTech |
Gilead Sciences and AIM ImmunoTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilead Sciences and AIM ImmunoTech
The main advantage of trading using opposite Gilead Sciences and AIM ImmunoTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilead Sciences 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.| Gilead Sciences vs. Pfizer Inc | Gilead Sciences vs. Johnson Johnson | Gilead Sciences vs. Highway Holdings Limited | Gilead Sciences vs. QCR Holdings |
| AIM ImmunoTech vs. Aptorum Group Ltd | AIM ImmunoTech vs. Biocardia | AIM ImmunoTech vs. Virax Biolabs Group | AIM ImmunoTech vs. Revelation Biosciences |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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