Correlation Between Biodesix and ProPhase Labs
Can any of the company-specific risk be diversified away by investing in both Biodesix and ProPhase Labs 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 Biodesix and ProPhase Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biodesix and ProPhase Labs, you can compare the effects of market volatilities on Biodesix and ProPhase Labs 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 Biodesix with a short position of ProPhase Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biodesix and ProPhase Labs.
Diversification Opportunities for Biodesix and ProPhase Labs
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Biodesix and ProPhase is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Biodesix and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and Biodesix 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 Biodesix are associated (or correlated) with ProPhase Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPhase Labs has no effect on the direction of Biodesix i.e., Biodesix and ProPhase Labs go up and down completely randomly.
Pair Corralation between Biodesix and ProPhase Labs
Given the investment horizon of 90 days Biodesix is expected to generate 0.65 times more return on investment than ProPhase Labs. However, Biodesix is 1.54 times less risky than ProPhase Labs. It trades about 0.0 of its potential returns per unit of risk. ProPhase Labs is currently generating about -0.1 per unit of risk. If you would invest 149.00 in Biodesix on August 25, 2024 and sell it today you would lose (21.00) from holding Biodesix or give up 14.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biodesix vs. ProPhase Labs
Performance |
| Timeline |
| Biodesix |
| ProPhase Labs |
Biodesix and ProPhase Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biodesix and ProPhase Labs
The main advantage of trading using opposite Biodesix and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biodesix position performs unexpectedly, ProPhase Labs 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 ProPhase Labs will offset losses from the drop in ProPhase Labs' long position.| Biodesix vs. Aclaris Therapeutics | Biodesix vs. Castle Biosciences | Biodesix vs. Prenetics Global | Biodesix vs. DarioHealth Corp |
| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
Check out your portfolio center.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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