Correlation Between GeoVax Labs and Lixte Biotechnology

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

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

Diversification Opportunities for GeoVax Labs and Lixte Biotechnology

-0.62

Correlation Coefficient

GeoVax Labs  Lixte Biotechnology

Excellent diversification

The 3 months correlation between GeoVax and Lixte is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Lixte Biotechnology go up and down completely randomly.

Pair Corralation between GeoVax Labs and Lixte Biotechnology

Assuming the 90 days horizon GeoVax Labs is expected to under-perform the Lixte Biotechnology. In addition to that, GeoVax Labs is 1.46 times more volatile than Lixte Biotechnology Holdings. It trades about -0.15 of its total potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.16 per unit of volatility. If you would invest  3.80  in Lixte Biotechnology Holdings on December 4, 2024 and sell it today you would earn a total of  1.15  from holding Lixte Biotechnology Holdings or generate 30.26% return on investment over 90 days.

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

GeoVax Labs  vs.  Lixte Biotechnology Holdings

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 abnormal performance in the last few months, the Stock's basic 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.

Lixte Biotechnology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lixte Biotechnology Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lixte Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GeoVax Labs and Lixte Biotechnology

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

The idea behind GeoVax Labs and Lixte Biotechnology Holdings 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.