Correlation Between Phibro Animal and Qingling Motors

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

Diversification Opportunities for Phibro Animal and Qingling Motors

-0.07

Correlation Coefficient

Phibro Animal  Qingling Motors

Good diversification

The 3 months correlation between Phibro and Qingling is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors 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 Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of Phibro Animal i.e., Phibro Animal and Qingling Motors go up and down completely randomly.

Pair Corralation between Phibro Animal and Qingling Motors

Assuming the 90 days horizon Phibro Animal Health is expected to under-perform the Qingling Motors. In addition to that, Phibro Animal is 1.38 times more volatile than Qingling Motors Co. It trades about 0.0 of its total potential returns per unit of risk. Qingling Motors Co is currently generating about 0.04 per unit of volatility. If you would invest  6.20  in Qingling Motors Co on December 21, 2024 and sell it today you would earn a total of  0.22  from holding Qingling Motors Co or generate 3.55% 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.  Qingling Motors Co

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Qingling Motors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Qingling Motors Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Qingling Motors is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Phibro Animal and Qingling Motors

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

The idea behind Phibro Animal Health and Qingling Motors Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..