Correlation Between Telix Pharmaceuticals and Axalta Coating

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

Diversification Opportunities for Telix Pharmaceuticals and Axalta Coating

0.09

Correlation Coefficient

Telix Pharmaceuticals  Axalta Coating

Significant diversification

The 3 months correlation between Telix and Axalta is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals Limited and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems 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 Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Axalta Coating go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Axalta Coating

Considering the 90-day investment horizon Telix Pharmaceuticals Limited is expected to generate 1.88 times more return on investment than Axalta Coating. However, Telix Pharmaceuticals is 1.88 times more volatile than Axalta Coating Systems. It trades about 0.0 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about -0.26 per unit of risk. If you would invest  1,515  in Telix Pharmaceuticals Limited on October 7, 2024 and sell it today you would lose (22.00) from holding Telix Pharmaceuticals Limited or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.37%
Values	Daily Returns

Telix Pharmaceuticals Limited  vs.  Axalta Coating Systems

Telix Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telix Pharmaceuticals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Telix Pharmaceuticals is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Axalta Coating Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axalta Coating Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Axalta Coating is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telix Pharmaceuticals and Axalta Coating

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

The idea behind Telix Pharmaceuticals Limited and Axalta Coating Systems 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.