Correlation Between Phibro Animal and Cocrystal Pharma

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

Diversification Opportunities for Phibro Animal and Cocrystal Pharma

-0.32

Correlation Coefficient

Phibro Animal  Cocrystal Pharma

Very good diversification

The 3 months correlation between Phibro and Cocrystal is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Cocrystal Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cocrystal Pharma 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 Cocrystal Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cocrystal Pharma has no effect on the direction of Phibro Animal i.e., Phibro Animal and Cocrystal Pharma go up and down completely randomly.

Pair Corralation between Phibro Animal and Cocrystal Pharma

Given the investment horizon of 90 days Phibro Animal Health is expected to generate 0.39 times more return on investment than Cocrystal Pharma. However, Phibro Animal Health is 2.53 times less risky than Cocrystal Pharma. It trades about 0.02 of its potential returns per unit of risk. Cocrystal Pharma is currently generating about -0.03 per unit of risk. If you would invest  2,158  in Phibro Animal Health on December 20, 2024 and sell it today you would earn a total of  23.00  from holding Phibro Animal Health or generate 1.07% 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.  Cocrystal Pharma

Phibro Animal Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phibro Animal Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Phibro Animal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cocrystal Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cocrystal Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Phibro Animal and Cocrystal Pharma

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

The idea behind Phibro Animal Health and Cocrystal Pharma 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.