Correlation Between GeoVax Labs and Ocular Therapeutix

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

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

Diversification Opportunities for GeoVax Labs and Ocular Therapeutix

0.73

Correlation Coefficient

GeoVax Labs  Ocular Therapeutix

Poor diversification

The 3 months correlation between GeoVax and Ocular is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Ocular Therapeutix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocular Therapeutix 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 Ocular Therapeutix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocular Therapeutix has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Ocular Therapeutix go up and down completely randomly.

Pair Corralation between GeoVax Labs and Ocular Therapeutix

Given the investment horizon of 90 days GeoVax Labs is expected to under-perform the Ocular Therapeutix. In addition to that, GeoVax Labs is 1.1 times more volatile than Ocular Therapeutix. It trades about -0.22 of its total potential returns per unit of risk. Ocular Therapeutix is currently generating about -0.01 per unit of volatility. If you would invest  835.00  in Ocular Therapeutix on December 28, 2024 and sell it today you would lose (60.00) from holding Ocular Therapeutix or give up 7.19% 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.  Ocular Therapeutix

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.

Ocular Therapeutix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocular Therapeutix has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ocular Therapeutix is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with GeoVax Labs and Ocular Therapeutix

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

The idea behind GeoVax Labs and Ocular Therapeutix 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.