Correlation Between GeoVax Labs and Fulcrum Therapeutics

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

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

Diversification Opportunities for GeoVax Labs and Fulcrum Therapeutics

0.69

Correlation Coefficient

GeoVax Labs  Fulcrum Therapeutics

Poor diversification

The 3 months correlation between GeoVax and Fulcrum is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Fulcrum Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Therapeutics 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 Fulcrum Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Therapeutics has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Fulcrum Therapeutics go up and down completely randomly.

Pair Corralation between GeoVax Labs and Fulcrum Therapeutics

Given the investment horizon of 90 days GeoVax Labs is expected to under-perform the Fulcrum Therapeutics. In addition to that, GeoVax Labs is 1.28 times more volatile than Fulcrum Therapeutics. It trades about -0.22 of its total potential returns per unit of risk. Fulcrum Therapeutics is currently generating about -0.19 per unit of volatility. If you would invest  468.00  in Fulcrum Therapeutics on December 29, 2024 and sell it today you would lose (167.00) from holding Fulcrum Therapeutics or give up 35.68% of portfolio value over 90 days.

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

GeoVax Labs  vs.  Fulcrum Therapeutics

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 unfluctuating 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.

Fulcrum Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulcrum Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with GeoVax Labs and Fulcrum Therapeutics

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

The idea behind GeoVax Labs and Fulcrum 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.