Correlation Between SAB Biotherapeutics and GeoVax Labs
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics 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 SAB Biotherapeutics and GeoVax Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and GeoVax Labs, you can compare the effects of market volatilities on SAB Biotherapeutics 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 SAB Biotherapeutics with a short position of GeoVax Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and GeoVax Labs.
Diversification Opportunities for SAB Biotherapeutics and GeoVax Labs
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAB and GeoVax is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and GeoVax Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVax Labs and SAB Biotherapeutics 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 SAB Biotherapeutics 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 SAB Biotherapeutics i.e., SAB Biotherapeutics and GeoVax Labs go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and GeoVax Labs
Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 5.45 times less return on investment than GeoVax Labs. But when comparing it to its historical volatility, SAB Biotherapeutics is 1.83 times less risky than GeoVax Labs. It trades about 0.05 of its potential returns per unit of risk. GeoVax Labs is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 199.00 in GeoVax Labs on August 28, 2024 and sell it today you would earn a total of 71.00 from holding GeoVax Labs or generate 35.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. GeoVax Labs
Performance |
| Timeline |
| SAB Biotherapeutics |
| GeoVax Labs |
SAB Biotherapeutics and GeoVax Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and GeoVax Labs
The main advantage of trading using opposite SAB Biotherapeutics and GeoVax Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics 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.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| GeoVax Labs vs. Eliem Therapeutics | GeoVax Labs vs. Scpharmaceuticals | GeoVax Labs vs. Milestone Pharmaceuticals | GeoVax Labs vs. Seres Therapeutics |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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