Correlation Between BSP Financial and Telix Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Telix Pharmaceuticals 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 BSP Financial and Telix Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSP Financial Group and Telix Pharmaceuticals, you can compare the effects of market volatilities on BSP Financial and Telix Pharmaceuticals 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 BSP Financial with a short position of Telix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Telix Pharmaceuticals.
Diversification Opportunities for BSP Financial and Telix Pharmaceuticals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSP and Telix is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Telix Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telix Pharmaceuticals and BSP Financial 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 BSP Financial Group are associated (or correlated) with Telix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telix Pharmaceuticals has no effect on the direction of BSP Financial i.e., BSP Financial and Telix Pharmaceuticals go up and down completely randomly.
Pair Corralation between BSP Financial and Telix Pharmaceuticals
Assuming the 90 days trading horizon BSP Financial is expected to generate 1.15 times less return on investment than Telix Pharmaceuticals. But when comparing it to its historical volatility, BSP Financial Group is 1.06 times less risky than Telix Pharmaceuticals. It trades about 0.18 of its potential returns per unit of risk. Telix Pharmaceuticals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,302 in Telix Pharmaceuticals on October 20, 2024 and sell it today you would earn a total of 357.00 from holding Telix Pharmaceuticals or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Telix Pharmaceuticals
Performance |
| Timeline |
| BSP Financial Group |
| Telix Pharmaceuticals |
BSP Financial and Telix Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Telix Pharmaceuticals
The main advantage of trading using opposite BSP Financial and Telix Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Telix Pharmaceuticals 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 Telix Pharmaceuticals will offset losses from the drop in Telix Pharmaceuticals' long position.| BSP Financial vs. Queste Communications | BSP Financial vs. Pure Foods Tasmania | BSP Financial vs. 29Metals | BSP Financial vs. Centaurus Metals |
| Telix Pharmaceuticals vs. Latitude Financial Services | Telix Pharmaceuticals vs. BSP Financial Group | Telix Pharmaceuticals vs. Microequities Asset Management | Telix Pharmaceuticals vs. K2 Asset Management |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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