Correlation Between Clene and Rezolute

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

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

Diversification Opportunities for Clene and Rezolute

0.2

Correlation Coefficient

Clene  Rezolute

Modest diversification

The 3 months correlation between Clene and Rezolute is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Clene Inc and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Clene 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 Clene Inc 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 Clene i.e., Clene and Rezolute go up and down completely randomly.

Pair Corralation between Clene and Rezolute

Given the investment horizon of 90 days Clene Inc is expected to generate 0.98 times more return on investment than Rezolute. However, Clene Inc is 1.02 times less risky than Rezolute. It trades about 0.03 of its potential returns per unit of risk. Rezolute is currently generating about -0.03 per unit of risk. If you would invest  418.00  in Clene Inc on November 28, 2024 and sell it today you would earn a total of  13.00  from holding Clene Inc or generate 3.11% return on investment over 90 days.

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

Clene Inc  vs.  Rezolute

Clene Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clene Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Clene may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 latest unfluctuating performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Clene and Rezolute

The main advantage of trading using opposite Clene and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clene 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 Clene Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.