Correlation Between Innate Pharma and AIM ImmunoTech
Can any of the company-specific risk be diversified away by investing in both Innate Pharma 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 Innate Pharma and AIM ImmunoTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innate Pharma and AIM ImmunoTech, you can compare the effects of market volatilities on Innate Pharma 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 Innate Pharma with a short position of AIM ImmunoTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innate Pharma and AIM ImmunoTech.
Diversification Opportunities for Innate Pharma and AIM ImmunoTech
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innate and AIM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Innate Pharma and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech and Innate Pharma 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 Innate Pharma 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 Innate Pharma i.e., Innate Pharma and AIM ImmunoTech go up and down completely randomly.
Pair Corralation between Innate Pharma and AIM ImmunoTech
Given the investment horizon of 90 days Innate Pharma is expected to under-perform the AIM ImmunoTech. But the stock apears to be less risky and, when comparing its historical volatility, Innate Pharma is 1.2 times less risky than AIM ImmunoTech. The stock trades about -0.03 of its potential returns per unit of risk. The AIM ImmunoTech is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 49.00 in AIM ImmunoTech on September 2, 2024 and sell it today you would lose (26.00) from holding AIM ImmunoTech or give up 53.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innate Pharma vs. AIM ImmunoTech
Performance |
| Timeline |
| Innate Pharma |
| AIM ImmunoTech |
Innate Pharma and AIM ImmunoTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innate Pharma and AIM ImmunoTech
The main advantage of trading using opposite Innate Pharma and AIM ImmunoTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innate Pharma 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.| Innate Pharma vs. Eliem Therapeutics | Innate Pharma vs. HCW Biologics | Innate Pharma vs. Inhibrx | Innate Pharma vs. Anebulo Pharmaceuticals |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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