Correlation Between Telix Pharmaceuticals and SEVEN GROUP

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

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

Diversification Opportunities for Telix Pharmaceuticals and SEVEN GROUP

0.74

Correlation Coefficient

Telix Pharmaceuticals  SEVEN GROUP

Poor diversification

The 3 months correlation between Telix and SEVEN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals and SEVEN GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEVEN GROUP HOLDINGS 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 SEVEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEVEN GROUP HOLDINGS has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and SEVEN GROUP go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and SEVEN GROUP

Assuming the 90 days trading horizon Telix Pharmaceuticals is expected to generate 1.42 times more return on investment than SEVEN GROUP. However, Telix Pharmaceuticals is 1.42 times more volatile than SEVEN GROUP HOLDINGS. It trades about 0.16 of its potential returns per unit of risk. SEVEN GROUP HOLDINGS is currently generating about 0.08 per unit of risk. If you would invest  2,097  in Telix Pharmaceuticals on October 1, 2024 and sell it today you would earn a total of  398.00  from holding Telix Pharmaceuticals or generate 18.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Telix Pharmaceuticals  vs.  SEVEN GROUP HOLDINGS

Telix Pharmaceuticals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals are ranked lower than 12 (%) 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.

SEVEN GROUP HOLDINGS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SEVEN GROUP HOLDINGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SEVEN GROUP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Telix Pharmaceuticals and SEVEN GROUP

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

The idea behind Telix Pharmaceuticals and SEVEN GROUP HOLDINGS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.