Correlation Between Biocardia and Rezolute

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

By analyzing existing cross correlation between Biocardia and Rezolute, you can compare the effects of market volatilities on Biocardia and Rezolute 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 Biocardia with a short position of Rezolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biocardia and Rezolute.

Diversification Opportunities for Biocardia and Rezolute

-0.44

Correlation Coefficient

Biocardia  Rezolute

Very good diversification

The 3 months correlation between Biocardia and Rezolute is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Biocardia and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Biocardia 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 Biocardia are associated (or correlated) with Rezolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolute has no effect on the direction of Biocardia i.e., Biocardia and Rezolute go up and down completely randomly.

Pair Corralation between Biocardia and Rezolute

Given the investment horizon of 90 days Biocardia is expected to generate 1.34 times more return on investment than Rezolute. However, Biocardia is 1.34 times more volatile than Rezolute. It trades about 0.11 of its potential returns per unit of risk. Rezolute is currently generating about -0.2 per unit of risk. If you would invest  215.00  in Biocardia on December 30, 2024 and sell it today you would earn a total of  65.00  from holding Biocardia or generate 30.23% return on investment over 90 days.

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

Biocardia  vs.  Rezolute

Biocardia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biocardia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Biocardia sustained solid returns over the last few months and may actually be approaching a breakup point.

Rezolute

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rezolute has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Biocardia and Rezolute

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

The idea behind Biocardia and Rezolute 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.