Correlation Between Phibro Animal and CONMED

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

Diversification Opportunities for Phibro Animal and CONMED

-0.56

Correlation Coefficient

Phibro Animal  CONMED

Excellent diversification

The 3 months correlation between Phibro and CONMED is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED 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 CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Phibro Animal i.e., Phibro Animal and CONMED go up and down completely randomly.

Pair Corralation between Phibro Animal and CONMED

Given the investment horizon of 90 days Phibro Animal Health is expected to generate 1.37 times more return on investment than CONMED. However, Phibro Animal is 1.37 times more volatile than CONMED. It trades about 0.19 of its potential returns per unit of risk. CONMED is currently generating about -0.02 per unit of risk. If you would invest  1,929  in Phibro Animal Health on May 7, 2025 and sell it today you would earn a total of  785.00  from holding Phibro Animal Health or generate 40.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Phibro Animal Health  vs.  CONMED

Phibro Animal Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Phibro Animal Health are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical indicators, Phibro Animal exhibited solid returns over the last few months and may actually be approaching a breakup point.

CONMED

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONMED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, CONMED is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Phibro Animal and CONMED

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

The idea behind Phibro Animal Health and CONMED 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..