Correlation Between Tonix Pharmaceuticals and GeoVax Labs

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

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

Diversification Opportunities for Tonix Pharmaceuticals and GeoVax Labs

0.6

Correlation Coefficient

Tonix Pharmaceuticals  GeoVax Labs

Poor diversification

The 3 months correlation between Tonix and GeoVax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tonix Pharmaceuticals Holding and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals Holding 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 Tonix Pharmaceuticals i.e., Tonix Pharmaceuticals and GeoVax Labs go up and down completely randomly.

Pair Corralation between Tonix Pharmaceuticals and GeoVax Labs

Given the investment horizon of 90 days Tonix Pharmaceuticals Holding is expected to generate 3.32 times more return on investment than GeoVax Labs. However, Tonix Pharmaceuticals is 3.32 times more volatile than GeoVax Labs. It trades about 0.05 of its potential returns per unit of risk. GeoVax Labs is currently generating about -0.22 per unit of risk. If you would invest  3,601  in Tonix Pharmaceuticals Holding on December 28, 2024 and sell it today you would lose (725.00) from holding Tonix Pharmaceuticals Holding or give up 20.13% of portfolio value over 90 days.

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

Tonix Pharmaceuticals Holding  vs.  GeoVax Labs

Tonix Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Tonix Pharmaceuticals reported 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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tonix Pharmaceuticals and GeoVax Labs

The main advantage of trading using opposite Tonix Pharmaceuticals and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonix Pharmaceuticals 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 Tonix Pharmaceuticals Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.