Correlation Between Protagenic Therapeutics and Rezolute

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

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

Diversification Opportunities for Protagenic Therapeutics and Rezolute

0.23

Correlation Coefficient

Protagenic Therapeutics  Rezolute

Modest diversification

The 3 months correlation between Protagenic and Rezolute is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Protagenic Therapeutics and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Protagenic Therapeutics 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 Protagenic Therapeutics 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 Protagenic Therapeutics i.e., Protagenic Therapeutics and Rezolute go up and down completely randomly.

Pair Corralation between Protagenic Therapeutics and Rezolute

Given the investment horizon of 90 days Protagenic Therapeutics is expected to generate 8.15 times less return on investment than Rezolute. In addition to that, Protagenic Therapeutics is 2.3 times more volatile than Rezolute. It trades about 0.01 of its total potential returns per unit of risk. Rezolute is currently generating about 0.1 per unit of volatility. If you would invest  437.00  in Rezolute on September 5, 2024 and sell it today you would earn a total of  98.00  from holding Rezolute or generate 22.43% return on investment over 90 days.

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

Protagenic Therapeutics  vs.  Rezolute

Protagenic Therapeutics

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Protagenic Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Protagenic Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rezolute

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rezolute are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting essential indicators, Rezolute unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Protagenic Therapeutics and Rezolute

The main advantage of trading using opposite Protagenic Therapeutics and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagenic Therapeutics 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 Protagenic Therapeutics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.