Correlation Between Steel Dynamics and Telix Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics 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 Steel Dynamics and Telix Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Telix Pharmaceuticals Limited, you can compare the effects of market volatilities on Steel Dynamics 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 Steel Dynamics with a short position of Telix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Telix Pharmaceuticals.
Diversification Opportunities for Steel Dynamics and Telix Pharmaceuticals
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and Telix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Telix Pharmaceuticals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telix Pharmaceuticals and Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics i.e., Steel Dynamics and Telix Pharmaceuticals go up and down completely randomly.
Pair Corralation between Steel Dynamics and Telix Pharmaceuticals
Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.29 times less return on investment than Telix Pharmaceuticals. In addition to that, Steel Dynamics is 1.14 times more volatile than Telix Pharmaceuticals Limited. It trades about 0.16 of its total potential returns per unit of risk. Telix Pharmaceuticals Limited is currently generating about 0.24 per unit of volatility. If you would invest 1,334 in Telix Pharmaceuticals Limited on September 1, 2024 and sell it today you would earn a total of 217.00 from holding Telix Pharmaceuticals Limited or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Steel Dynamics vs. Telix Pharmaceuticals Limited
Performance |
| Timeline |
| Steel Dynamics |
| Telix Pharmaceuticals |
Steel Dynamics and Telix Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Telix Pharmaceuticals
The main advantage of trading using opposite Steel Dynamics and Telix Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics 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.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Telix Pharmaceuticals vs. Rigel Pharmaceuticals | Telix Pharmaceuticals vs. Geron | Telix Pharmaceuticals vs. Verastem | Telix Pharmaceuticals vs. Immutep Ltd ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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