Correlation Between GeoVax Labs and HighPeak Energy

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

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

Diversification Opportunities for GeoVax Labs and HighPeak Energy

0.72

Correlation Coefficient

GeoVax Labs  HighPeak Energy

Poor diversification

The 3 months correlation between GeoVax and HighPeak is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and HighPeak Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HighPeak Energy 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 HighPeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HighPeak Energy has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and HighPeak Energy go up and down completely randomly.

Pair Corralation between GeoVax Labs and HighPeak Energy

Assuming the 90 days horizon GeoVax Labs is expected to generate 1.82 times more return on investment than HighPeak Energy. However, GeoVax Labs is 1.82 times more volatile than HighPeak Energy. It trades about 0.03 of its potential returns per unit of risk. HighPeak Energy is currently generating about -0.07 per unit of risk. If you would invest  10.00  in GeoVax Labs on December 30, 2024 and sell it today you would lose (4.97) from holding GeoVax Labs or give up 49.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.42%
Values	Daily Returns

GeoVax Labs  vs.  HighPeak Energy

GeoVax Labs

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GeoVax Labs showed solid returns over the last few months and may actually be approaching a breakup point.

HighPeak Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days HighPeak Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GeoVax Labs and HighPeak Energy

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

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