Correlation Between Kineta and Rezolute

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

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

Diversification Opportunities for Kineta and Rezolute

-0.05

Correlation Coefficient

Kineta  Rezolute

Good diversification

The 3 months correlation between Kineta and Rezolute is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kineta Inc and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Kineta 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 Kineta 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 Kineta i.e., Kineta and Rezolute go up and down completely randomly.

Pair Corralation between Kineta and Rezolute

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the Rezolute. In addition to that, Kineta is 2.77 times more volatile than Rezolute. It trades about -0.08 of its total potential returns per unit of risk. Rezolute is currently generating about -0.02 per unit of volatility. If you would invest  499.00  in Rezolute on September 17, 2024 and sell it today you would lose (39.00) from holding Rezolute or give up 7.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.85%
Values	Daily Returns

Kineta Inc  vs.  Rezolute

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kineta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rezolute

Risk-Adjusted Performance

0 of 100

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 comparatively stable essential indicators, Rezolute is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kineta and Rezolute

The main advantage of trading using opposite Kineta and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kineta 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 Kineta 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.