Correlation Between GeoVax Labs and Equity Commonwealth

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

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

Diversification Opportunities for GeoVax Labs and Equity Commonwealth

-0.46

Correlation Coefficient

GeoVax Labs  Equity Commonwealth

Very good diversification

The 3 months correlation between GeoVax and Equity is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Equity Commonwealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Commonwealth 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 Equity Commonwealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Commonwealth has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Equity Commonwealth go up and down completely randomly.

Pair Corralation between GeoVax Labs and Equity Commonwealth

Given the investment horizon of 90 days GeoVax Labs is expected to under-perform the Equity Commonwealth. In addition to that, GeoVax Labs is 13.38 times more volatile than Equity Commonwealth. It trades about -0.24 of its total potential returns per unit of risk. Equity Commonwealth is currently generating about -0.05 per unit of volatility. If you would invest  2,513  in Equity Commonwealth on January 20, 2024 and sell it today you would lose (9.00) from holding Equity Commonwealth or give up 0.36% of portfolio value over 90 days.

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

GeoVax Labs  vs.  Equity Commonwealth

GeoVax Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GeoVax Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Equity Commonwealth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Commonwealth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Equity Commonwealth is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GeoVax Labs and Equity Commonwealth

The main advantage of trading using opposite GeoVax Labs and Equity Commonwealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoVax Labs position performs unexpectedly, Equity Commonwealth 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 Equity Commonwealth will offset losses from the drop in Equity Commonwealth's long position.

The idea behind GeoVax Labs and Equity Commonwealth 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.