Correlation Between Lixte Biotechnology and Rezolute

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

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

Diversification Opportunities for Lixte Biotechnology and Rezolute

-0.15

Correlation Coefficient

Lixte Biotechnology  Rezolute

Good diversification

The 3 months correlation between Lixte and Rezolute is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Lixte Biotechnology 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 Lixte Biotechnology Holdings 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 Lixte Biotechnology i.e., Lixte Biotechnology and Rezolute go up and down completely randomly.

Pair Corralation between Lixte Biotechnology and Rezolute

Given the investment horizon of 90 days Lixte Biotechnology is expected to generate 1.71 times less return on investment than Rezolute. In addition to that, Lixte Biotechnology is 1.78 times more volatile than Rezolute. It trades about 0.02 of its total potential returns per unit of risk. Rezolute is currently generating about 0.06 per unit of volatility. If you would invest  200.00  in Rezolute on September 18, 2024 and sell it today you would earn a total of  244.00  from holding Rezolute or generate 122.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Lixte Biotechnology Holdings  vs.  Rezolute

Lixte Biotechnology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lixte Biotechnology Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Lixte Biotechnology unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Lixte Biotechnology and Rezolute

The main advantage of trading using opposite Lixte Biotechnology and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology 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 Lixte Biotechnology Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.