Correlation Between Phibro Animal and Performance Food
Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Performance Food 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 Performance Food 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 Performance Food Group, you can compare the effects of market volatilities on Phibro Animal and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Performance Food.
Diversification Opportunities for Phibro Animal and Performance Food
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Phibro and Performance is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Phibro Animal i.e., Phibro Animal and Performance Food go up and down completely randomly.
Pair Corralation between Phibro Animal and Performance Food
Assuming the 90 days horizon Phibro Animal is expected to generate 1.39 times less return on investment than Performance Food. In addition to that, Phibro Animal is 1.6 times more volatile than Performance Food Group. It trades about 0.08 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.17 per unit of volatility. If you would invest 6,100 in Performance Food Group on October 26, 2024 and sell it today you would earn a total of 2,300 from holding Performance Food Group or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phibro Animal Health vs. Performance Food Group
Performance |
| Timeline |
| Phibro Animal Health |
| Performance Food |
Phibro Animal and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Performance Food
The main advantage of trading using opposite Phibro Animal and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Phibro Animal vs. GOLD ROAD RES | Phibro Animal vs. Yuexiu Transport Infrastructure | Phibro Animal vs. SAFEROADS HLDGS | Phibro Animal vs. Television Broadcasts Limited |
| Performance Food vs. OPKO HEALTH | Performance Food vs. US Physical Therapy | Performance Food vs. Highlight Communications AG | Performance Food vs. Phibro Animal Health |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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