Correlation Between Equillium and GeoVax Labs

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

By analyzing existing cross correlation between Equillium and GeoVax Labs, you can compare the effects of market volatilities on Equillium and GeoVax Labs 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 Equillium with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and GeoVax Labs.

Diversification Opportunities for Equillium and GeoVax Labs

-0.09

Correlation Coefficient

Equillium  GeoVax Labs

Good diversification

The 3 months correlation between Equillium and GeoVax is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Equillium 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 Equillium are associated (or correlated) with GeoVax Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeoVax Labs has no effect on the direction of Equillium i.e., Equillium and GeoVax Labs go up and down completely randomly.

Pair Corralation between Equillium and GeoVax Labs

Allowing for the 90-day total investment horizon Equillium is expected to under-perform the GeoVax Labs. But the stock apears to be less risky and, when comparing its historical volatility, Equillium is 2.86 times less risky than GeoVax Labs. The stock trades about -0.05 of its potential returns per unit of risk. The GeoVax Labs is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10.00  in GeoVax Labs on December 29, 2024 and sell it today you would lose (4.97) from holding GeoVax Labs or give up 49.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.05%
Values	Daily Returns

Equillium  vs.  GeoVax Labs

Equillium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GeoVax Labs

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GeoVax Labs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equillium and GeoVax Labs

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

The idea behind Equillium and GeoVax Labs 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..