I was in Sweden for 59 days, then left to Cyprus (non-Schengen) for 90 days. I would like to go back to Sweden, and as I understand it, I would only have one month left since It has only been 5 months out of 6 of my whole stay. Is this correct? Or could the clock reset since I have been out of the Schengen area 3 months?
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It doesn't quite work that way. You don't actually “reset the clock” by leaving for 90 days but since it's a sliding window, it's almost the same. In your case, there would be one month left when you re-enter Sweden but at the end of this month, the first day of your first stay will not count anymore as it will then be more than six months in the past. You can therefore stay one day more. Same thing the day after that, and the day after, etc. rolling over until you have stayed for 90 days again.
You can check that with the calculator mentioned in this earlier answer.
