Correlation Between Reviva Pharmaceuticals and Clene

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

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

Diversification Opportunities for Reviva Pharmaceuticals and Clene

0.02

Correlation Coefficient

Reviva Pharmaceuticals  Clene

Significant diversification

The 3 months correlation between Reviva and Clene is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Reviva Pharmaceuticals Holding and Clene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clene Inc and Reviva Pharmaceuticals 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 Reviva Pharmaceuticals Holdings are associated (or correlated) with Clene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clene Inc has no effect on the direction of Reviva Pharmaceuticals i.e., Reviva Pharmaceuticals and Clene go up and down completely randomly.

Pair Corralation between Reviva Pharmaceuticals and Clene

Given the investment horizon of 90 days Reviva Pharmaceuticals is expected to generate 3.45 times less return on investment than Clene. But when comparing it to its historical volatility, Reviva Pharmaceuticals Holdings is 2.1 times less risky than Clene. It trades about 0.06 of its potential returns per unit of risk. Clene Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3.72  in Clene Inc on November 29, 2024 and sell it today you would earn a total of  0.28  from holding Clene Inc or generate 7.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.58%
Values	Daily Returns

Reviva Pharmaceuticals Holding  vs.  Clene Inc

Reviva Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reviva Pharmaceuticals Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Reviva Pharmaceuticals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Clene Inc

Risk-Adjusted Performance

OK

Over the last 90 days Clene Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Clene showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reviva Pharmaceuticals and Clene

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

The idea behind Reviva Pharmaceuticals Holdings and Clene Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.