Correlation Between PICKN PAY and Phibro Animal

Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PICKN PAY STORES and Phibro Animal Health, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Phibro Animal.

Diversification Opportunities for PICKN PAY and Phibro Animal

-0.07

Correlation Coefficient

PICKN PAY  Phibro Animal

Good diversification

The 3 months correlation between PICKN and Phibro is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES 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 PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and Phibro Animal go up and down completely randomly.

Pair Corralation between PICKN PAY and Phibro Animal

Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Phibro Animal. In addition to that, PICKN PAY is 1.14 times more volatile than Phibro Animal Health. It trades about -0.03 of its total potential returns per unit of risk. Phibro Animal Health is currently generating about 0.04 per unit of volatility. If you would invest  1,288  in Phibro Animal Health on October 11, 2024 and sell it today you would earn a total of  672.00  from holding Phibro Animal Health or generate 52.17% return on investment over 90 days.

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

PICKN PAY STORES  vs.  Phibro Animal Health

PICKN PAY STORES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PICKN PAY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Phibro Animal Health

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with PICKN PAY and Phibro Animal

The main advantage of trading using opposite PICKN PAY and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.

The idea behind PICKN PAY STORES and Phibro Animal Health 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.