Correlation Between Telesis Bio and Rxsight

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

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

Diversification Opportunities for Telesis Bio and Rxsight

0.36

Correlation Coefficient

Telesis Bio  Rxsight

Weak diversification

The 3 months correlation between Telesis and Rxsight is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Telesis Bio and Rxsight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rxsight and Telesis Bio 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 Telesis Bio are associated (or correlated) with Rxsight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rxsight has no effect on the direction of Telesis Bio i.e., Telesis Bio and Rxsight go up and down completely randomly.

Pair Corralation between Telesis Bio and Rxsight

Given the investment horizon of 90 days Telesis Bio is expected to generate 14.68 times more return on investment than Rxsight. However, Telesis Bio is 14.68 times more volatile than Rxsight. It trades about 0.11 of its potential returns per unit of risk. Rxsight is currently generating about -0.08 per unit of risk. If you would invest  342.00  in Telesis Bio on September 3, 2024 and sell it today you would lose (44.00) from holding Telesis Bio or give up 12.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	37.5%
Values	Daily Returns

Telesis Bio  vs.  Rxsight

Telesis Bio

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Telesis Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak forward indicators, Telesis Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Rxsight

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rxsight has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Telesis Bio and Rxsight

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

The idea behind Telesis Bio and Rxsight 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.