Correlation Between FWBI Old and GeoVax Labs

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

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

Diversification Opportunities for FWBI Old and GeoVax Labs

-0.24

Correlation Coefficient

FWBI Old  GeoVax Labs

Very good diversification

The 3 months correlation between FWBI and GeoVax is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FWBI Old and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and FWBI Old 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 FWBI Old 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 FWBI Old i.e., FWBI Old and GeoVax Labs go up and down completely randomly.

Pair Corralation between FWBI Old and GeoVax Labs

If you would invest  224.00  in GeoVax Labs on October 21, 2024 and sell it today you would lose (2.00) from holding GeoVax Labs or give up 0.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

FWBI Old  vs.  GeoVax Labs

FWBI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FWBI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, FWBI Old is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

GeoVax Labs

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GeoVax Labs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FWBI Old and GeoVax Labs

The main advantage of trading using opposite FWBI Old and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FWBI Old 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 FWBI Old 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.