Correlation Between Lexaria Bioscience and GeoVax Labs
Can any of the company-specific risk be diversified away by investing in both Lexaria Bioscience 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 Lexaria Bioscience and GeoVax Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexaria Bioscience Corp and GeoVax Labs, you can compare the effects of market volatilities on Lexaria Bioscience 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 Lexaria Bioscience with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexaria Bioscience and GeoVax Labs.
Diversification Opportunities for Lexaria Bioscience and GeoVax Labs
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexaria and GeoVax is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lexaria Bioscience Corp and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Lexaria Bioscience 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 Lexaria Bioscience Corp 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 Lexaria Bioscience i.e., Lexaria Bioscience and GeoVax Labs go up and down completely randomly.
Pair Corralation between Lexaria Bioscience and GeoVax Labs
Assuming the 90 days horizon Lexaria Bioscience Corp is expected to generate 2.73 times more return on investment than GeoVax Labs. However, Lexaria Bioscience is 2.73 times more volatile than GeoVax Labs. It trades about 0.08 of its potential returns per unit of risk. GeoVax Labs is currently generating about 0.11 per unit of risk. If you would invest 50.00 in Lexaria Bioscience Corp on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Lexaria Bioscience Corp or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.7% |
| Values | Daily Returns |
Lexaria Bioscience Corp vs. GeoVax Labs
Performance |
| Timeline |
| Lexaria Bioscience Corp |
| GeoVax Labs |
Lexaria Bioscience and GeoVax Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexaria Bioscience and GeoVax Labs
The main advantage of trading using opposite Lexaria Bioscience and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexaria Bioscience 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.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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