Correlation Between GeoVax Labs and NLS Pharmaceutics

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

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

Diversification Opportunities for GeoVax Labs and NLS Pharmaceutics

-0.11

Correlation Coefficient

GeoVax Labs  NLS Pharmaceutics

Good diversification

The 3 months correlation between GeoVax and NLS is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and NLS Pharmaceutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLS Pharmaceutics 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 NLS Pharmaceutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLS Pharmaceutics has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and NLS Pharmaceutics go up and down completely randomly.

Pair Corralation between GeoVax Labs and NLS Pharmaceutics

Assuming the 90 days horizon GeoVax Labs is expected to under-perform the NLS Pharmaceutics. In addition to that, GeoVax Labs is 1.16 times more volatile than NLS Pharmaceutics AG. It trades about -0.15 of its total potential returns per unit of risk. NLS Pharmaceutics AG is currently generating about 0.09 per unit of volatility. If you would invest  1.10  in NLS Pharmaceutics AG on December 3, 2024 and sell it today you would earn a total of  0.10  from holding NLS Pharmaceutics AG or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

GeoVax Labs  vs.  NLS Pharmaceutics AG

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.

NLS Pharmaceutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NLS Pharmaceutics AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NLS Pharmaceutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GeoVax Labs and NLS Pharmaceutics

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

The idea behind GeoVax Labs and NLS Pharmaceutics AG 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.