Correlation Between Lixte Biotechnology and GeoVax Labs

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

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

Diversification Opportunities for Lixte Biotechnology and GeoVax Labs

-0.62

Correlation Coefficient

Lixte Biotechnology  GeoVax Labs

Excellent diversification

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

Pair Corralation between Lixte Biotechnology and GeoVax Labs

Assuming the 90 days horizon Lixte Biotechnology Holdings is expected to generate 0.97 times more return on investment than GeoVax Labs. However, Lixte Biotechnology Holdings is 1.03 times less risky than GeoVax Labs. It trades about 0.16 of its potential returns per unit of risk. GeoVax Labs is currently generating about -0.05 per unit of risk. If you would invest  2.10  in Lixte Biotechnology Holdings on December 4, 2024 and sell it today you would earn a total of  2.90  from holding Lixte Biotechnology Holdings or generate 138.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.27%
Values	Daily Returns

Lixte Biotechnology Holdings  vs.  GeoVax Labs

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.

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.

Pair Trading with Lixte Biotechnology and GeoVax Labs

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

The idea behind Lixte Biotechnology Holdings and GeoVax Labs 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 CEOs Directory module to screen CEOs from public companies around the world.