Correlation Between SAB Biotherapeutics and GeoVax Labs

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

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

Diversification Opportunities for SAB Biotherapeutics and GeoVax Labs

-0.03

Correlation Coefficient

SAB Biotherapeutics  GeoVax Labs

Good diversification

The 3 months correlation between SAB and GeoVax is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and SAB Biotherapeutics 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 SAB Biotherapeutics 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 SAB Biotherapeutics i.e., SAB Biotherapeutics and GeoVax Labs go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and GeoVax Labs

Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 0.99 times more return on investment than GeoVax Labs. However, SAB Biotherapeutics is 1.01 times less risky than GeoVax Labs. It trades about 0.1 of its potential returns per unit of risk. GeoVax Labs is currently generating about 0.02 per unit of risk. If you would invest  279.00  in SAB Biotherapeutics on September 13, 2024 and sell it today you would earn a total of  108.00  from holding SAB Biotherapeutics or generate 38.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SAB Biotherapeutics  vs.  GeoVax Labs

SAB Biotherapeutics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental drivers, SAB Biotherapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

GeoVax Labs

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GeoVax Labs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SAB Biotherapeutics and GeoVax Labs

The main advantage of trading using opposite SAB Biotherapeutics and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics 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 SAB Biotherapeutics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.