Correlation Between Universal Health and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Universal Health and Phibro Animal 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 Universal Health and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and Phibro Animal Health, you can compare the effects of market volatilities on Universal Health and Phibro Animal 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 Universal Health with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Phibro Animal.
Diversification Opportunities for Universal Health and Phibro Animal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Phibro is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health and Universal Health 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 Universal Health Realty are associated (or correlated) with Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of Universal Health i.e., Universal Health and Phibro Animal go up and down completely randomly.
Pair Corralation between Universal Health and Phibro Animal
Assuming the 90 days horizon Universal Health Realty is expected to generate 0.63 times more return on investment than Phibro Animal. However, Universal Health Realty is 1.59 times less risky than Phibro Animal. It trades about 0.29 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.14 per unit of risk. If you would invest 3,472 in Universal Health Realty on November 5, 2024 and sell it today you would earn a total of 287.00 from holding Universal Health Realty or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Phibro Animal Health
Performance |
| Timeline |
| Universal Health Realty |
| Phibro Animal Health |
Universal Health and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Phibro Animal
The main advantage of trading using opposite Universal Health and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Phibro Animal 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| Universal Health vs. US FOODS HOLDING | Universal Health vs. Algonquin Power Utilities | Universal Health vs. United Natural Foods | Universal Health vs. United Utilities Group |
| Phibro Animal vs. QINGCI GAMES INC | Phibro Animal vs. UNIQA INSURANCE GR | Phibro Animal vs. International Game Technology | Phibro Animal vs. FRACTAL GAMING 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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