Correlation Between Telix Pharmaceuticals and Keros Therapeutics

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

Diversification Opportunities for Telix Pharmaceuticals and Keros Therapeutics

0.03

Correlation Coefficient

Telix Pharmaceuticals  Keros Therapeutics

Significant diversification

The 3 months correlation between Telix and Keros is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Telix Pharmaceuticals Limited and Keros Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keros Therapeutics 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 Keros Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keros Therapeutics has no effect on the direction of Telix Pharmaceuticals i.e., Telix Pharmaceuticals and Keros Therapeutics go up and down completely randomly.

Pair Corralation between Telix Pharmaceuticals and Keros Therapeutics

Assuming the 90 days horizon Telix Pharmaceuticals Limited is expected to generate 0.34 times more return on investment than Keros Therapeutics. However, Telix Pharmaceuticals Limited is 2.95 times less risky than Keros Therapeutics. It trades about 0.16 of its potential returns per unit of risk. Keros Therapeutics is currently generating about -0.07 per unit of risk. If you would invest  1,189  in Telix Pharmaceuticals Limited on September 16, 2024 and sell it today you would earn a total of  411.00  from holding Telix Pharmaceuticals Limited or generate 34.57% return on investment over 90 days.

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

Telix Pharmaceuticals Limited  vs.  Keros Therapeutics

Telix Pharmaceuticals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telix Pharmaceuticals Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Telix Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Keros Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keros Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Telix Pharmaceuticals and Keros Therapeutics

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

The idea behind Telix Pharmaceuticals Limited and Keros Therapeutics 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.