Correlation Between Pact Group and Telix Pharmaceuticals

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

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

Diversification Opportunities for Pact Group and Telix Pharmaceuticals

-0.44

Correlation Coefficient

Pact Group  Telix Pharmaceuticals

Very good diversification

The 3 months correlation between Pact and Telix is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings and Telix Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telix Pharmaceuticals and Pact Group 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 Pact Group Holdings 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 Pact Group i.e., Pact Group and Telix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Pact Group and Telix Pharmaceuticals

Assuming the 90 days trading horizon Pact Group Holdings is expected to generate 0.61 times more return on investment than Telix Pharmaceuticals. However, Pact Group Holdings is 1.65 times less risky than Telix Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Telix Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest  81.00  in Pact Group Holdings on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Pact Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Pact Group Holdings  vs.  Telix Pharmaceuticals

Pact Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pact Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Pact Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Telix Pharmaceuticals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Telix Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pact Group and Telix Pharmaceuticals

The main advantage of trading using opposite Pact Group and Telix Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group 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 Pact Group Holdings and Telix Pharmaceuticals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.