Correlation Between Phibro Animal and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and NEW PACIFIC 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 NEW PACIFIC 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 NEW PACIFIC METALS, you can compare the effects of market volatilities on Phibro Animal and NEW PACIFIC 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 NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and NEW PACIFIC.
Diversification Opportunities for Phibro Animal and NEW PACIFIC
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phibro and NEW is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS 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 NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of Phibro Animal i.e., Phibro Animal and NEW PACIFIC go up and down completely randomly.
Pair Corralation between Phibro Animal and NEW PACIFIC
Assuming the 90 days horizon Phibro Animal Health is expected to generate 0.75 times more return on investment than NEW PACIFIC. However, Phibro Animal Health is 1.34 times less risky than NEW PACIFIC. It trades about 0.15 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about 0.06 per unit of risk. If you would invest 1,960 in Phibro Animal Health on November 5, 2024 and sell it today you would earn a total of 120.00 from holding Phibro Animal Health or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Phibro Animal Health vs. NEW PACIFIC METALS
Performance |
| Timeline |
| Phibro Animal Health |
| NEW PACIFIC METALS |
Phibro Animal and NEW PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and NEW PACIFIC
The main advantage of trading using opposite Phibro Animal and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.| Phibro Animal vs. QINGCI GAMES INC | Phibro Animal vs. UNIQA INSURANCE GR | Phibro Animal vs. International Game Technology | Phibro Animal vs. FRACTAL GAMING GROUP |
| NEW PACIFIC vs. BW OFFSHORE LTD | NEW PACIFIC vs. Iridium Communications | NEW PACIFIC vs. Eidesvik Offshore ASA | NEW PACIFIC vs. Major Drilling Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |