Correlation Between AIM ImmunoTech and Tempest Therapeutics

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

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

Diversification Opportunities for AIM ImmunoTech and Tempest Therapeutics

-0.16

Correlation Coefficient

AIM ImmunoTech  Tempest Therapeutics

Good diversification

The 3 months correlation between AIM and Tempest is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AIM ImmunoTech and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest Therapeutics 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 Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of AIM ImmunoTech i.e., AIM ImmunoTech and Tempest Therapeutics go up and down completely randomly.

Pair Corralation between AIM ImmunoTech and Tempest Therapeutics

Considering the 90-day investment horizon AIM ImmunoTech is expected to under-perform the Tempest Therapeutics. In addition to that, AIM ImmunoTech is 1.96 times more volatile than Tempest Therapeutics. It trades about -0.12 of its total potential returns per unit of risk. Tempest Therapeutics is currently generating about 0.12 per unit of volatility. If you would invest  650.00  in Tempest Therapeutics on May 15, 2025 and sell it today you would earn a total of  231.00  from holding Tempest Therapeutics or generate 35.54% return on investment over 90 days.

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

AIM ImmunoTech  vs.  Tempest Therapeutics

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 weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tempest Therapeutics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tempest Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Tempest Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIM ImmunoTech and Tempest Therapeutics

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

The idea behind AIM ImmunoTech and Tempest Therapeutics 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.