Correlation Between Phibro Animal and First Quantum
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and First Quantum 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 First Quantum 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 First Quantum Minerals, you can compare the effects of market volatilities on Phibro Animal and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and First Quantum.
Diversification Opportunities for Phibro Animal and First Quantum
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Phibro and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Phibro Animal i.e., Phibro Animal and First Quantum go up and down completely randomly.
Pair Corralation between Phibro Animal and First Quantum
Assuming the 90 days horizon Phibro Animal Health is expected to generate 0.8 times more return on investment than First Quantum. However, Phibro Animal Health is 1.25 times less risky than First Quantum. It trades about 0.1 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.0 per unit of risk. If you would invest 2,000 in Phibro Animal Health on November 4, 2024 and sell it today you would earn a total of 80.00 from holding Phibro Animal Health or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Phibro Animal Health vs. First Quantum Minerals
Performance |
| Timeline |
| Phibro Animal Health |
| First Quantum Minerals |
Phibro Animal and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and First Quantum
The main advantage of trading using opposite Phibro Animal and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| Phibro Animal vs. STEEL DYNAMICS | Phibro Animal vs. Mount Gibson Iron | Phibro Animal vs. TOMBADOR IRON LTD | Phibro Animal vs. Siamgas And Petrochemicals |
| First Quantum vs. Highlight Communications AG | First Quantum vs. China National Building | First Quantum vs. China Communications Services | First Quantum vs. Ribbon Communications |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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