Correlation Between Phibro Animal and Intracellular

Can any of the company-specific risk be diversified away by investing in both Phibro Animal and Intracellular 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 Intracellular 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 Intracellular Th, you can compare the effects of market volatilities on Phibro Animal and Intracellular 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 Intracellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Intracellular.

Diversification Opportunities for Phibro Animal and Intracellular

0.65

Correlation Coefficient

Phibro Animal  Intracellular

Poor diversification

The 3 months correlation between Phibro and Intracellular is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Intracellular Th in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracellular Th 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 Intracellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracellular Th has no effect on the direction of Phibro Animal i.e., Phibro Animal and Intracellular go up and down completely randomly.

Pair Corralation between Phibro Animal and Intracellular

Given the investment horizon of 90 days Phibro Animal is expected to generate 1.3 times less return on investment than Intracellular. In addition to that, Phibro Animal is 1.09 times more volatile than Intracellular Th. It trades about 0.1 of its total potential returns per unit of risk. Intracellular Th is currently generating about 0.14 per unit of volatility. If you would invest  7,328  in Intracellular Th on August 30, 2024 and sell it today you would earn a total of  1,331  from holding Intracellular Th or generate 18.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Phibro Animal Health  vs.  Intracellular Th

Phibro Animal Health

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Phibro Animal Health are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Phibro Animal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intracellular Th

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intracellular Th are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Intracellular demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phibro Animal and Intracellular

The main advantage of trading using opposite Phibro Animal and Intracellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal position performs unexpectedly, Intracellular 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 Intracellular will offset losses from the drop in Intracellular's long position.

The idea behind Phibro Animal Health and Intracellular Th pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.