Correlation Between Telix Pharmaceuticals and Summit Resources

Can any of the company-specific risk be diversified away by investing in both Telix Pharmaceuticals and Summit 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 Summit 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 Summit Resources Limited, you can compare the effects of market volatilities on Telix Pharmaceuticals and Summit 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 Summit Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telix Pharmaceuticals and Summit Resources.

Diversification Opportunities for Telix Pharmaceuticals and Summit Resources

0.43

Correlation Coefficient

Telix Pharmaceuticals  Summit Resources

Very weak diversification

The 3 months correlation between Telix and Summit is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals and Summit Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit 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 Summit Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Resources has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Summit Resources go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Summit Resources

Assuming the 90 days trading horizon Telix Pharmaceuticals is expected to generate 0.4 times more return on investment than Summit Resources. However, Telix Pharmaceuticals is 2.49 times less risky than Summit Resources. It trades about 0.19 of its potential returns per unit of risk. Summit Resources Limited is currently generating about 0.05 per unit of risk. If you would invest  2,378  in Telix Pharmaceuticals on November 28, 2024 and sell it today you would earn a total of  736.00  from holding Telix Pharmaceuticals or generate 30.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Telix Pharmaceuticals  vs.  Summit Resources Limited

Telix Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals are ranked lower than 15 (%) 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.

Summit Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Resources Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Summit Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telix Pharmaceuticals and Summit Resources

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

The idea behind Telix Pharmaceuticals and Summit Resources Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.