Correlation Between Phibro Animal and AT S

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

Diversification Opportunities for Phibro Animal and AT S

0.04

Correlation Coefficient

Phibro Animal  AT S

Significant diversification

The 3 months correlation between Phibro and AUS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Phibro Animal i.e., Phibro Animal and AT S go up and down completely randomly.

Pair Corralation between Phibro Animal and AT S

Assuming the 90 days horizon Phibro Animal Health is expected to under-perform the AT S. But the stock apears to be less risky and, when comparing its historical volatility, Phibro Animal Health is 1.17 times less risky than AT S. The stock trades about -0.01 of its potential returns per unit of risk. The AT S Austria is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,120  in AT S Austria on December 19, 2024 and sell it today you would earn a total of  260.00  from holding AT S Austria or generate 23.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Phibro Animal Health  vs.  AT S Austria

Phibro Animal Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phibro Animal Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Phibro Animal is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

AT S Austria

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AT S reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phibro Animal and AT S

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

The idea behind Phibro Animal Health and AT S Austria 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..