Correlation Between Arcus Biosciences and GeoVax Labs

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Can any of the company-specific risk be diversified away by investing in both Arcus Biosciences 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 Arcus Biosciences and GeoVax Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcus Biosciences and GeoVax Labs, you can compare the effects of market volatilities on Arcus Biosciences 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 Arcus Biosciences with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcus Biosciences and GeoVax Labs.

Diversification Opportunities for Arcus Biosciences and GeoVax Labs

ArcusGeoVaxDiversified AwayArcusGeoVaxDiversified Away100%
-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Arcus and GeoVax is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Arcus Biosciences 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 Arcus Biosciences 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 Arcus Biosciences i.e., Arcus Biosciences and GeoVax Labs go up and down completely randomly.

Pair Corralation between Arcus Biosciences and GeoVax Labs

Given the investment horizon of 90 days Arcus Biosciences is expected to under-perform the GeoVax Labs. But the stock apears to be less risky and, when comparing its historical volatility, Arcus Biosciences is 2.88 times less risky than GeoVax Labs. The stock trades about -0.1 of its potential returns per unit of risk. The GeoVax Labs is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  201.00  in GeoVax Labs on October 14, 2024 and sell it today you would earn a total of  22.00  from holding GeoVax Labs or generate 10.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Arcus Biosciences  vs.  GeoVax Labs

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0204060
JavaScript chart by amCharts 3.21.15RCUS GOVX
       Timeline  
Arcus Biosciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Arcus Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan141516171819
GeoVax Labs 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GeoVax Labs showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan22.533.5

Arcus Biosciences and GeoVax Labs Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.79-4.34-2.88-1.430.01.312.674.035.396.75 0.0050.0100.0150.0200.0250.030
JavaScript chart by amCharts 3.21.15RCUS GOVX
       Returns  

Pair Trading with Arcus Biosciences and GeoVax Labs

The main advantage of trading using opposite Arcus Biosciences and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcus Biosciences 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 Arcus Biosciences 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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