Correlation Between Cann American and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Cann American 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 Cann American and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cann American Corp and Phibro Animal Health, you can compare the effects of market volatilities on Cann American 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 Cann American with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Phibro Animal.
Diversification Opportunities for Cann American and Phibro Animal
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cann and Phibro is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp 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 Cann American 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 Cann American Corp 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 Cann American i.e., Cann American and Phibro Animal go up and down completely randomly.
Pair Corralation between Cann American and Phibro Animal
Given the investment horizon of 90 days Cann American Corp is expected to generate 6.78 times more return on investment than Phibro Animal. However, Cann American is 6.78 times more volatile than Phibro Animal Health. It trades about 0.1 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.0 per unit of risk. If you would invest 0.30 in Cann American Corp on December 1, 2024 and sell it today you would earn a total of 0.08 from holding Cann American Corp or generate 26.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Cann American Corp vs. Phibro Animal Health
Performance |
Timeline |
Cann American Corp |
Phibro Animal Health |
Cann American and Phibro Animal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cann American and Phibro Animal
The main advantage of trading using opposite Cann American and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American 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.Cann American vs. XCPCNL Business Services | Cann American vs. Golden Developing Solutions | Cann American vs. Indo Global Exchange | Cann American vs. Cgrowth Capital |
Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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