Correlation Between Incannex Healthcare and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Incannex 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 Incannex 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 Incannex Healthcare Ltd and Phibro Animal Health, you can compare the effects of market volatilities on Incannex 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 Incannex Healthcare with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incannex Healthcare and Phibro Animal.
Diversification Opportunities for Incannex Healthcare and Phibro Animal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Incannex and Phibro is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Incannex Healthcare Ltd 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 Incannex 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 Incannex Healthcare Ltd 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 Incannex Healthcare i.e., Incannex Healthcare and Phibro Animal go up and down completely randomly.
Pair Corralation between Incannex Healthcare and Phibro Animal
Given the investment horizon of 90 days Incannex Healthcare Ltd is expected to generate 11.4 times more return on investment than Phibro Animal. However, Incannex Healthcare is 11.4 times more volatile than Phibro Animal Health. It trades about 0.03 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.06 per unit of risk. If you would invest 327.00 in Incannex Healthcare Ltd on August 30, 2024 and sell it today you would lose (145.00) from holding Incannex Healthcare Ltd or give up 44.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Incannex Healthcare Ltd vs. Phibro Animal Health
Performance |
| Timeline |
| Incannex Healthcare |
| Phibro Animal Health |
Incannex Healthcare and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incannex Healthcare and Phibro Animal
The main advantage of trading using opposite Incannex Healthcare and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incannex 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.| Incannex Healthcare vs. Phibro Animal Health | Incannex Healthcare vs. Procaps Group SA | Incannex Healthcare vs. Amphastar P | Incannex Healthcare vs. Alkermes Plc |
| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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