Correlation Between Telix Pharmaceuticals and Sims

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

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

Diversification Opportunities for Telix Pharmaceuticals and Sims

0.2

Correlation Coefficient

Telix Pharmaceuticals  Sims

Modest diversification

The 3 months correlation between Telix and Sims is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Sims go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Sims

Assuming the 90 days trading horizon Telix Pharmaceuticals is expected to generate 1.53 times more return on investment than Sims. However, Telix Pharmaceuticals is 1.53 times more volatile than Sims. It trades about 0.1 of its potential returns per unit of risk. Sims is currently generating about 0.0 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Telix Pharmaceuticals  vs.  Sims

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.

Sims

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Telix Pharmaceuticals and Sims

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

The idea behind Telix Pharmaceuticals and Sims 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .