Correlation Between Phibro Animal and Ascend Wellness
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Ascend Wellness 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 Phibro Animal and Ascend Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phibro Animal Health and Ascend Wellness Holdings, you can compare the effects of market volatilities on Phibro Animal and Ascend Wellness 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 Phibro Animal with a short position of Ascend Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Ascend Wellness.
Diversification Opportunities for Phibro Animal and Ascend Wellness
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phibro and Ascend is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Ascend Wellness Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascend Wellness Holdings and Phibro Animal 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 Phibro Animal Health are associated (or correlated) with Ascend Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascend Wellness Holdings has no effect on the direction of Phibro Animal i.e., Phibro Animal and Ascend Wellness go up and down completely randomly.
Pair Corralation between Phibro Animal and Ascend Wellness
Given the investment horizon of 90 days Phibro Animal Health is expected to generate 0.56 times more return on investment than Ascend Wellness. However, Phibro Animal Health is 1.78 times less risky than Ascend Wellness. It trades about 0.06 of its potential returns per unit of risk. Ascend Wellness Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,196 in Phibro Animal Health on August 30, 2024 and sell it today you would earn a total of 1,163 from holding Phibro Animal Health or generate 97.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phibro Animal Health vs. Ascend Wellness Holdings
Performance |
| Timeline |
| Phibro Animal Health |
| Ascend Wellness Holdings |
Phibro Animal and Ascend Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Ascend Wellness
The main advantage of trading using opposite Phibro Animal and Ascend Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Ascend Wellness 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 Ascend Wellness will offset losses from the drop in Ascend Wellness' long position.| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
| Ascend Wellness vs. Green Cures Botanical | Ascend Wellness vs. Cann American Corp | Ascend Wellness vs. Rimrock Gold Corp | Ascend Wellness vs. Galexxy Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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