Correlation Between Sana Biotechnology and GeoVax Labs

Can any of the company-specific risk be diversified away by investing in both Sana 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 Sana 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 Sana Biotechnology and GeoVax Labs, you can compare the effects of market volatilities on Sana 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 Sana Biotechnology with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and GeoVax Labs.

Diversification Opportunities for Sana Biotechnology and GeoVax Labs

-0.35

Correlation Coefficient

Sana Biotechnology  GeoVax Labs

Very good diversification

The 3 months correlation between Sana and GeoVax is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Sana 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 Sana Biotechnology 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 Sana Biotechnology i.e., Sana Biotechnology and GeoVax Labs go up and down completely randomly.

Pair Corralation between Sana Biotechnology and GeoVax Labs

Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the GeoVax Labs. But the stock apears to be less risky and, when comparing its historical volatility, Sana Biotechnology is 2.09 times less risky than GeoVax Labs. The stock trades about -0.03 of its potential returns per unit of risk. The GeoVax Labs is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  678.00  in GeoVax Labs on September 23, 2024 and sell it today you would lose (449.00) from holding GeoVax Labs or give up 66.22% of portfolio value over 90 days.

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

Sana Biotechnology  vs.  GeoVax Labs

Sana Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sana Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GeoVax Labs

Risk-Adjusted Performance

0 of 100

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 unsteady basic indicators, GeoVax Labs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sana Biotechnology and GeoVax Labs

The main advantage of trading using opposite Sana Biotechnology and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana 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 Sana Biotechnology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.