Correlation Between GeoVax Labs and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both GeoVax Labs and Lexaria Bioscience 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 GeoVax Labs and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeoVax Labs and Lexaria Bioscience Corp, you can compare the effects of market volatilities on GeoVax Labs and Lexaria Bioscience 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 GeoVax Labs with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoVax Labs and Lexaria Bioscience.
Diversification Opportunities for GeoVax Labs and Lexaria Bioscience
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GeoVax and Lexaria is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp and GeoVax Labs 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 GeoVax Labs are associated (or correlated) with Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between GeoVax Labs and Lexaria Bioscience
Assuming the 90 days horizon GeoVax Labs is expected to generate 1.4 times more return on investment than Lexaria Bioscience. However, GeoVax Labs is 1.4 times more volatile than Lexaria Bioscience Corp. It trades about 0.09 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about 0.11 per unit of risk. If you would invest 10.00 in GeoVax Labs on September 1, 2024 and sell it today you would earn a total of 1.00 from holding GeoVax Labs or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GeoVax Labs vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| GeoVax Labs |
| Lexaria Bioscience Corp |
GeoVax Labs and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeoVax Labs and Lexaria Bioscience
The main advantage of trading using opposite GeoVax Labs and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoVax Labs position performs unexpectedly, Lexaria Bioscience 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 Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.The idea behind GeoVax Labs and Lexaria Bioscience Corp 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.| Lexaria Bioscience vs. Lexaria Bioscience Corp | Lexaria Bioscience vs. Lixte Biotechnology Holdings | Lexaria Bioscience vs. GeoVax Labs | Lexaria Bioscience vs. Reviva Pharmaceuticals Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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