Correlation Between Aptose Biosciences and Rezolute

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

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

Diversification Opportunities for Aptose Biosciences and Rezolute

0.14

Correlation Coefficient

Aptose Biosciences  Rezolute

Average diversification

The 3 months correlation between Aptose and Rezolute is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Aptose Biosciences 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 Aptose Biosciences 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 Aptose Biosciences i.e., Aptose Biosciences and Rezolute go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Rezolute

Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the Rezolute. In addition to that, Aptose Biosciences is 2.18 times more volatile than Rezolute. It trades about -0.46 of its total potential returns per unit of risk. Rezolute is currently generating about -0.09 per unit of volatility. If you would invest  544.00  in Rezolute on September 3, 2024 and sell it today you would lose (40.00) from holding Rezolute or give up 7.35% of portfolio value over 90 days.

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

Aptose Biosciences  vs.  Rezolute

Aptose Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptose Biosciences 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rezolute

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rezolute are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Rezolute may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aptose Biosciences and Rezolute

The main advantage of trading using opposite Aptose Biosciences and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences 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 Aptose Biosciences 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.

Check out your portfolio center.

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.