Correlation Between Telix Pharmaceuticals and Indiana Resources

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

By analyzing existing cross correlation between Telix Pharmaceuticals and Indiana Resources, you can compare the effects of market volatilities on Telix Pharmaceuticals and Indiana Resources 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 Indiana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telix Pharmaceuticals and Indiana Resources.

Diversification Opportunities for Telix Pharmaceuticals and Indiana Resources

0.84

Correlation Coefficient

Telix Pharmaceuticals  Indiana Resources

Very poor diversification

The 3 months correlation between Telix and Indiana is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals and Indiana Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indiana Resources 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 are associated (or correlated) with Indiana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indiana Resources has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Indiana Resources go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Indiana Resources

Assuming the 90 days trading horizon Telix Pharmaceuticals is expected to generate 0.58 times more return on investment than Indiana Resources. However, Telix Pharmaceuticals is 1.72 times less risky than Indiana Resources. It trades about 0.1 of its potential returns per unit of risk. Indiana Resources is currently generating about 0.05 per unit of risk. If you would invest  701.00  in Telix Pharmaceuticals on September 21, 2024 and sell it today you would earn a total of  1,866  from holding Telix Pharmaceuticals or generate 266.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Telix Pharmaceuticals  vs.  Indiana Resources

Telix Pharmaceuticals

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals are ranked lower than 14 (%) 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.

Indiana Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indiana Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indiana Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telix Pharmaceuticals and Indiana Resources

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

The idea behind Telix Pharmaceuticals and Indiana Resources 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.