Correlation Between Acadia Healthcare and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare 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 Acadia Healthcare and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Phibro Animal Health, you can compare the effects of market volatilities on Acadia Healthcare 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 Acadia Healthcare with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Phibro Animal.
Diversification Opportunities for Acadia Healthcare and Phibro Animal
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acadia and Phibro is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare i.e., Acadia Healthcare and Phibro Animal go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Phibro Animal
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.29 times more return on investment than Phibro Animal. However, Acadia Healthcare is 1.29 times more volatile than Phibro Animal Health. It trades about 0.11 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.1 per unit of risk. If you would invest 3,960 in Acadia Healthcare on November 4, 2024 and sell it today you would earn a total of 240.00 from holding Acadia Healthcare or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acadia Healthcare vs. Phibro Animal Health
Performance |
| Timeline |
| Acadia Healthcare |
| Phibro Animal Health |
Acadia Healthcare and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Phibro Animal
The main advantage of trading using opposite Acadia Healthcare and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare 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.| Acadia Healthcare vs. CAIRN HOMES EO | Acadia Healthcare vs. Haverty Furniture Companies | Acadia Healthcare vs. Aedas Homes SA | Acadia Healthcare vs. KENEDIX OFFICE INV |
| Phibro Animal vs. STEEL DYNAMICS | Phibro Animal vs. Mount Gibson Iron | Phibro Animal vs. TOMBADOR IRON LTD | Phibro Animal vs. Siamgas And Petrochemicals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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