Correlation Between NEW PACIFIC and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC and Phibro Animal 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 NEW PACIFIC and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW PACIFIC METALS and Phibro Animal Health, you can compare the effects of market volatilities on NEW PACIFIC and Phibro Animal 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 NEW PACIFIC with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and Phibro Animal.
Diversification Opportunities for NEW PACIFIC and Phibro Animal
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEW and Phibro is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health and NEW PACIFIC 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 NEW PACIFIC METALS are associated (or correlated) with Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and Phibro Animal go up and down completely randomly.
Pair Corralation between NEW PACIFIC and Phibro Animal
Assuming the 90 days trading horizon NEW PACIFIC METALS is expected to under-perform the Phibro Animal. In addition to that, NEW PACIFIC is 1.52 times more volatile than Phibro Animal Health. It trades about -0.01 of its total potential returns per unit of risk. Phibro Animal Health is currently generating about 0.1 per unit of volatility. If you would invest 1,001 in Phibro Animal Health on October 26, 2024 and sell it today you would earn a total of 1,079 from holding Phibro Animal Health or generate 107.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW PACIFIC METALS vs. Phibro Animal Health
Performance |
| Timeline |
| NEW PACIFIC METALS |
| Phibro Animal Health |
NEW PACIFIC and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW PACIFIC and Phibro Animal
The main advantage of trading using opposite NEW PACIFIC and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW PACIFIC position performs unexpectedly, Phibro Animal 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| NEW PACIFIC vs. Phibro Animal Health | NEW PACIFIC vs. Penn National Gaming | NEW PACIFIC vs. TROPHY GAMES DEV | NEW PACIFIC vs. OURGAME INTHOLDL 00005 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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