Correlation Between Exagen and GeoVax Labs

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

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

Diversification Opportunities for Exagen and GeoVax Labs

0.3

Correlation Coefficient

Exagen  GeoVax Labs

Weak diversification

The 3 months correlation between Exagen and GeoVax is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Exagen 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 Exagen Inc 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 Exagen i.e., Exagen and GeoVax Labs go up and down completely randomly.

Pair Corralation between Exagen and GeoVax Labs

Considering the 90-day investment horizon Exagen is expected to generate 14.54 times less return on investment than GeoVax Labs. But when comparing it to its historical volatility, Exagen Inc is 9.44 times less risky than GeoVax Labs. It trades about 0.03 of its potential returns per unit of risk. GeoVax Labs is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,335  in GeoVax Labs on October 4, 2024 and sell it today you would lose (1,088) from holding GeoVax Labs or give up 81.5% of portfolio value over 90 days.

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

Exagen Inc  vs.  GeoVax Labs

Exagen Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

GeoVax Labs

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GeoVax Labs are ranked lower than 5 (%) 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.

Pair Trading with Exagen and GeoVax Labs

The main advantage of trading using opposite Exagen and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exagen 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 Exagen Inc 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.