Correlation Between SIGA Technologies and Phibro Animal

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

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

Diversification Opportunities for SIGA Technologies and Phibro Animal

-0.23

Correlation Coefficient

SIGA Technologies  Phibro Animal

Very good diversification

The 3 months correlation between SIGA and Phibro is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies i.e., SIGA Technologies and Phibro Animal go up and down completely randomly.

Pair Corralation between SIGA Technologies and Phibro Animal

Given the investment horizon of 90 days SIGA Technologies is expected to under-perform the Phibro Animal. But the stock apears to be less risky and, when comparing its historical volatility, SIGA Technologies is 1.26 times less risky than Phibro Animal. The stock trades about -0.03 of its potential returns per unit of risk. The Phibro Animal Health is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,095  in Phibro Animal Health on December 27, 2024 and sell it today you would earn a total of  73.00  from holding Phibro Animal Health or generate 3.48% return on investment over 90 days.

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

SIGA Technologies  vs.  Phibro Animal Health

SIGA Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIGA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, SIGA Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Phibro Animal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SIGA Technologies and Phibro Animal

The main advantage of trading using opposite SIGA Technologies and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGA Technologies 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 SIGA Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.