Correlation Between Rezolute and Graphite Bio

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

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

Diversification Opportunities for Rezolute and Graphite Bio

-0.26

Correlation Coefficient

Rezolute  Graphite Bio

Very good diversification

The 3 months correlation between Rezolute and Graphite is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Rezolute and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio and Rezolute 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 Rezolute are associated (or correlated) with Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Rezolute i.e., Rezolute and Graphite Bio go up and down completely randomly.

Pair Corralation between Rezolute and Graphite Bio

If you would invest  470.00  in Rezolute on September 4, 2024 and sell it today you would earn a total of  40.00  from holding Rezolute or generate 8.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Rezolute  vs.  Graphite Bio

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 conflicting essential indicators, Rezolute unveiled solid returns over the last few months and may actually be approaching a breakup point.

Graphite Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graphite Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Graphite Bio is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Rezolute and Graphite Bio

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

The idea behind Rezolute and Graphite Bio 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.