Correlation Between Lixte Biotechnology and GeoVax Labs
Can any of the company-specific risk be diversified away by investing in both Lixte 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 Lixte 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 Lixte Biotechnology Holdings and GeoVax Labs, you can compare the effects of market volatilities on Lixte 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 Lixte Biotechnology with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and GeoVax Labs.
Diversification Opportunities for Lixte Biotechnology and GeoVax Labs
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lixte and GeoVax is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and Lixte 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 Lixte Biotechnology Holdings 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 Lixte Biotechnology i.e., Lixte Biotechnology and GeoVax Labs go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and GeoVax Labs
Assuming the 90 days horizon Lixte Biotechnology is expected to generate 2.41 times less return on investment than GeoVax Labs. But when comparing it to its historical volatility, Lixte Biotechnology Holdings is 1.57 times less risky than GeoVax Labs. It trades about 0.07 of its potential returns per unit of risk. GeoVax Labs is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 20.00 in GeoVax Labs on November 27, 2024 and sell it today you would lose (12.00) from holding GeoVax Labs or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.46% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. GeoVax Labs
Performance |
| Timeline |
| Lixte Biotechnology |
| GeoVax Labs |
Lixte Biotechnology and GeoVax Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and GeoVax Labs
The main advantage of trading using opposite Lixte Biotechnology and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte 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.| Lixte Biotechnology vs. Reviva Pharmaceuticals Holdings | Lixte Biotechnology vs. CannBioRx Life Sciences |
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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