Correlation Between GeoVax Labs and Onconova Therapeutics

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

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

Diversification Opportunities for GeoVax Labs and Onconova Therapeutics

-0.4

Correlation Coefficient

GeoVax Labs  Onconova Therapeutics

Very good diversification

The 3 months correlation between GeoVax and Onconova is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GeoVax Labs and Onconova Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onconova Therapeutics 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 Onconova Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onconova Therapeutics has no effect on the direction of GeoVax Labs i.e., GeoVax Labs and Onconova Therapeutics go up and down completely randomly.

Pair Corralation between GeoVax Labs and Onconova Therapeutics

If you would invest  102.00  in Onconova Therapeutics on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Onconova Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

GeoVax Labs  vs.  Onconova Therapeutics

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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Onconova Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onconova Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Onconova Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GeoVax Labs and Onconova Therapeutics

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

The idea behind GeoVax Labs and Onconova Therapeutics 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 Transaction History module to view history of all your transactions and understand their impact on performance.