Correlation Between GeoVax Labs and Equillium

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

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

Diversification Opportunities for GeoVax Labs and Equillium

-0.31

Correlation Coefficient

GeoVax Labs  Equillium

Very good diversification

The 3 months correlation between GeoVax and Equillium is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Equillium go up and down completely randomly.

Pair Corralation between GeoVax Labs and Equillium

Assuming the 90 days horizon GeoVax Labs is expected to under-perform the Equillium. In addition to that, GeoVax Labs is 1.94 times more volatile than Equillium. It trades about -0.07 of its total potential returns per unit of risk. Equillium is currently generating about 0.13 per unit of volatility. If you would invest  64.00  in Equillium on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Equillium or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

GeoVax Labs  vs.  Equillium

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 fairly stable basic indicators, GeoVax Labs is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Equillium

Risk-Adjusted Performance

Insignificant

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

Pair Trading with GeoVax Labs and Equillium

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

The idea behind GeoVax Labs and Equillium 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.