Correlation Between GeoVax Labs and Adial Pharmaceuticals

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

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

Diversification Opportunities for GeoVax Labs and Adial Pharmaceuticals

0.91

Correlation Coefficient

GeoVax Labs  Adial Pharmaceuticals

Almost no diversification

The 3 months correlation between GeoVax and Adial is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Adial Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adial Pharmaceuticals and GeoVax Labs 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 GeoVax Labs are associated (or correlated) with Adial Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adial Pharmaceuticals has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Adial Pharmaceuticals go up and down completely randomly.

Pair Corralation between GeoVax Labs and Adial Pharmaceuticals

Given the investment horizon of 90 days GeoVax Labs is expected to under-perform the Adial Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, GeoVax Labs is 1.14 times less risky than Adial Pharmaceuticals. The stock trades about -0.16 of its potential returns per unit of risk. The Adial Pharmaceuticals is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Adial Pharmaceuticals on December 19, 2024 and sell it today you would lose (31.00) from holding Adial Pharmaceuticals or give up 29.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

GeoVax Labs  vs.  Adial Pharmaceuticals

GeoVax Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days GeoVax Labs 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Adial Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adial Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GeoVax Labs and Adial Pharmaceuticals

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

The idea behind GeoVax Labs and Adial Pharmaceuticals 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.