Correlation Between Telix Pharmaceuticals and Innovent Biologics

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

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

Diversification Opportunities for Telix Pharmaceuticals and Innovent Biologics

0.41

Correlation Coefficient

Telix Pharmaceuticals  Innovent Biologics

Very weak diversification

The 3 months correlation between Telix and Innovent is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals Limited and Innovent Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovent Biologics and Telix Pharmaceuticals 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 Telix Pharmaceuticals Limited are associated (or correlated) with Innovent Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovent Biologics has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Innovent Biologics go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Innovent Biologics

Assuming the 90 days horizon Telix Pharmaceuticals is expected to generate 1.31 times less return on investment than Innovent Biologics. In addition to that, Telix Pharmaceuticals is 1.03 times more volatile than Innovent Biologics. It trades about 0.08 of its total potential returns per unit of risk. Innovent Biologics is currently generating about 0.1 per unit of volatility. If you would invest  475.00  in Innovent Biologics on December 29, 2024 and sell it today you would earn a total of  115.00  from holding Innovent Biologics or generate 24.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Telix Pharmaceuticals Limited  vs.  Innovent Biologics

Telix Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Telix Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Innovent Biologics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovent Biologics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Innovent Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telix Pharmaceuticals and Innovent Biologics

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

The idea behind Telix Pharmaceuticals Limited and Innovent Biologics 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.