Correlation Between HEALTHSTREAM (HL5SG) and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and Phibro Animal Health, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and Phibro Animal.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and Phibro Animal
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HEALTHSTREAM and Phibro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM 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 HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM 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 HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and Phibro Animal go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and Phibro Animal
Assuming the 90 days trading horizon HEALTHSTREAM (HL5SG) is expected to generate 1.39 times less return on investment than Phibro Animal. But when comparing it to its historical volatility, HEALTHSTREAM is 1.6 times less risky than Phibro Animal. It trades about 0.12 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,562 in Phibro Animal Health on November 7, 2024 and sell it today you would earn a total of 518.00 from holding Phibro Animal Health or generate 33.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHSTREAM vs. Phibro Animal Health
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| Phibro Animal Health |
HEALTHSTREAM (HL5SG) and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and Phibro Animal
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) 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.| HEALTHSTREAM (HL5SG) vs. CHIBA BANK | HEALTHSTREAM (HL5SG) vs. China Communications Services | HEALTHSTREAM (HL5SG) vs. Carnegie Clean Energy | HEALTHSTREAM (HL5SG) vs. TELECOM ITALRISP ADR10 |
| Phibro Animal vs. MAANSHAN IRON H | Phibro Animal vs. Endeavour Mining PLC | Phibro Animal vs. Tianjin Capital Environmental | Phibro Animal vs. MINCO SILVER |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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