Correlation Between Lucy Scientific and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Lucy Scientific 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 Lucy Scientific and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucy Scientific Discovery and Phibro Animal Health, you can compare the effects of market volatilities on Lucy Scientific 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 Lucy Scientific with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucy Scientific and Phibro Animal.
Diversification Opportunities for Lucy Scientific and Phibro Animal
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lucy and Phibro is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lucy Scientific Discovery 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 Lucy Scientific 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 Lucy Scientific Discovery 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 Lucy Scientific i.e., Lucy Scientific and Phibro Animal go up and down completely randomly.
Pair Corralation between Lucy Scientific and Phibro Animal
Given the investment horizon of 90 days Lucy Scientific Discovery is expected to generate 32.54 times more return on investment than Phibro Animal. However, Lucy Scientific is 32.54 times more volatile than Phibro Animal Health. It trades about 0.08 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 2,990 in Lucy Scientific Discovery on August 29, 2024 and sell it today you would lose (2,988) from holding Lucy Scientific Discovery or give up 99.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.39% |
| Values | Daily Returns |
Lucy Scientific Discovery vs. Phibro Animal Health
Performance |
| Timeline |
| Lucy Scientific Discovery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Phibro Animal Health |
Lucy Scientific and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucy Scientific and Phibro Animal
The main advantage of trading using opposite Lucy Scientific and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucy Scientific 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.| Lucy Scientific vs. Shuttle Pharmaceuticals | Lucy Scientific vs. Lifecore Biomedical | Lucy Scientific vs. Journey Medical Corp | Lucy Scientific vs. Akanda Corp |
| Phibro Animal vs. Capricor Therapeutics | Phibro Animal vs. Soleno Therapeutics | Phibro Animal vs. Bio Path Holdings | Phibro Animal vs. Moleculin Biotech |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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