Correlation Between Phibro Animal and Procaps Group
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Procaps Group 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 Procaps Group 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 Procaps Group SA, you can compare the effects of market volatilities on Phibro Animal and Procaps Group 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 Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Procaps Group.
Diversification Opportunities for Phibro Animal and Procaps Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phibro and Procaps is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA 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 Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Phibro Animal i.e., Phibro Animal and Procaps Group go up and down completely randomly.
Pair Corralation between Phibro Animal and Procaps Group
Given the investment horizon of 90 days Phibro Animal Health is expected to generate 0.22 times more return on investment than Procaps Group. However, Phibro Animal Health is 4.59 times less risky than Procaps Group. It trades about 0.13 of its potential returns per unit of risk. Procaps Group SA is currently generating about -0.4 per unit of risk. If you would invest 2,073 in Phibro Animal Health on November 3, 2024 and sell it today you would earn a total of 108.00 from holding Phibro Animal Health or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Phibro Animal Health vs. Procaps Group SA
Performance |
| Timeline |
| Phibro Animal Health |
| Procaps Group SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Phibro Animal and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Procaps Group
The main advantage of trading using opposite Phibro Animal and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group's long position.| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
| Procaps Group vs. Procaps Group SA | Procaps Group vs. Quantum Si incorporated | Procaps Group vs. Jasper Therapeutics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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