Correlation Between Phibro Animal and Five Below
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Five Below 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 Five Below 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 Five Below, you can compare the effects of market volatilities on Phibro Animal and Five Below 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 Five Below. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Five Below.
Diversification Opportunities for Phibro Animal and Five Below
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Phibro and Five is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below 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 Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of Phibro Animal i.e., Phibro Animal and Five Below go up and down completely randomly.
Pair Corralation between Phibro Animal and Five Below
Assuming the 90 days horizon Phibro Animal Health is expected to generate 0.83 times more return on investment than Five Below. However, Phibro Animal Health is 1.2 times less risky than Five Below. It trades about 0.15 of its potential returns per unit of risk. Five Below is currently generating about -0.13 per unit of risk. If you would invest 1,960 in Phibro Animal Health on November 7, 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 Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Phibro Animal Health vs. Five Below
Performance |
| Timeline |
| Phibro Animal Health |
| Five Below |
Phibro Animal and Five Below Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Five Below
The main advantage of trading using opposite Phibro Animal and Five Below positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Five Below 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 Five Below will offset losses from the drop in Five Below's long position.| Phibro Animal vs. FAST RETAIL ADR | Phibro Animal vs. GRUPO CARSO A1 | Phibro Animal vs. CAREER EDUCATION | Phibro Animal vs. Xinhua Winshare Publishing |
| Five Below vs. Pebblebrook Hotel Trust | Five Below vs. Diversified Healthcare Trust | Five Below vs. Keck Seng Investments | Five Below vs. SEI INVESTMENTS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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