Correlation Between AIM ImmunoTech and Avidity Biosciences

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

By analyzing existing cross correlation between AIM ImmunoTech and Avidity Biosciences, you can compare the effects of market volatilities on AIM ImmunoTech and Avidity Biosciences 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 Avidity Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ImmunoTech and Avidity Biosciences.

Diversification Opportunities for AIM ImmunoTech and Avidity Biosciences

-0.83

Correlation Coefficient

AIM ImmunoTech  Avidity Biosciences

Pay attention - limited upside

The 3 months correlation between AIM and Avidity is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Avidity Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidity Biosciences 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 Avidity Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidity Biosciences has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Avidity Biosciences go up and down completely randomly.

Pair Corralation between AIM ImmunoTech and Avidity Biosciences

Considering the 90-day investment horizon AIM ImmunoTech is expected to under-perform the Avidity Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, AIM ImmunoTech is 1.38 times less risky than Avidity Biosciences. The stock trades about -0.17 of its potential returns per unit of risk. The Avidity Biosciences is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,402  in Avidity Biosciences on August 19, 2025 and sell it today you would earn a total of  2,666  from holding Avidity Biosciences or generate 60.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AIM ImmunoTech  vs.  Avidity Biosciences

AIM ImmunoTech

Risk-Adjusted Performance

Weakest

Over the last 90 days AIM ImmunoTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Avidity Biosciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avidity Biosciences are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Avidity Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIM ImmunoTech and Avidity Biosciences

The main advantage of trading using opposite AIM ImmunoTech and Avidity Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ImmunoTech position performs unexpectedly, Avidity Biosciences 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 Avidity Biosciences will offset losses from the drop in Avidity Biosciences' long position.

The idea behind AIM ImmunoTech and Avidity Biosciences 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.