Correlation Between Phibro Animal and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Maple Leaf 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 Maple Leaf 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 Maple Leaf Green, you can compare the effects of market volatilities on Phibro Animal and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Maple Leaf.
Diversification Opportunities for Phibro Animal and Maple Leaf
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Phibro and Maple is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Maple Leaf Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Green 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Green has no effect on the direction of Phibro Animal i.e., Phibro Animal and Maple Leaf go up and down completely randomly.
Pair Corralation between Phibro Animal and Maple Leaf
Given the investment horizon of 90 days Phibro Animal is expected to generate 8.7 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, Phibro Animal Health is 6.34 times less risky than Maple Leaf. It trades about 0.06 of its potential returns per unit of risk. Maple Leaf Green is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Maple Leaf Green on August 31, 2024 and sell it today you would earn a total of 0.80 from holding Maple Leaf Green or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phibro Animal Health vs. Maple Leaf Green
Performance |
| Timeline |
| Phibro Animal Health |
| Maple Leaf Green |
Phibro Animal and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Maple Leaf
The main advantage of trading using opposite Phibro Animal and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.The idea behind Phibro Animal Health and Maple Leaf Green pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Maple Leaf vs. Brainsway | Maple Leaf vs. Venus Concept | Maple Leaf vs. Tactile Systems Technology | Maple Leaf vs. Icecure Medical |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |