Correlation Between Global Net and Telix Pharmaceuticals

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

By analyzing existing cross correlation between Global Net Lease and Telix Pharmaceuticals Limited, you can compare the effects of market volatilities on Global Net and Telix Pharmaceuticals 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 Global Net with a short position of Telix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Telix Pharmaceuticals.

Diversification Opportunities for Global Net and Telix Pharmaceuticals

0.16

Correlation Coefficient

Global Net  Telix Pharmaceuticals

Average diversification

The 3 months correlation between Global and Telix is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Telix Pharmaceuticals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telix Pharmaceuticals and Global Net 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 Global Net Lease are associated (or correlated) with Telix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telix Pharmaceuticals has no effect on the direction of Global Net i.e., Global Net and Telix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Global Net and Telix Pharmaceuticals

Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Telix Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Global Net Lease is 1.87 times less risky than Telix Pharmaceuticals. The stock trades about -0.01 of its potential returns per unit of risk. The Telix Pharmaceuticals Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,515  in Telix Pharmaceuticals Limited on October 24, 2024 and sell it today you would earn a total of  171.00  from holding Telix Pharmaceuticals Limited or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.58%
Values	Daily Returns

Global Net Lease  vs.  Telix Pharmaceuticals Limited

Global Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Global Net is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Telix Pharmaceuticals

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Global Net and Telix Pharmaceuticals

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

The idea behind Global Net Lease and Telix Pharmaceuticals Limited 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.