Correlation Between LumiraDx and ProPhase Labs
Can any of the company-specific risk be diversified away by investing in both LumiraDx 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 LumiraDx and ProPhase Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LumiraDx and ProPhase Labs, you can compare the effects of market volatilities on LumiraDx 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 LumiraDx with a short position of ProPhase Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of LumiraDx and ProPhase Labs.
Diversification Opportunities for LumiraDx and ProPhase Labs
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LumiraDx and ProPhase is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding LumiraDx and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and LumiraDx 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 LumiraDx 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 LumiraDx i.e., LumiraDx and ProPhase Labs go up and down completely randomly.
Pair Corralation between LumiraDx and ProPhase Labs
Given the investment horizon of 90 days LumiraDx is expected to under-perform the ProPhase Labs. In addition to that, LumiraDx is 1.4 times more volatile than ProPhase Labs. It trades about -0.08 of its total potential returns per unit of risk. ProPhase Labs is currently generating about -0.09 per unit of volatility. If you would invest 1,012 in ProPhase Labs on August 25, 2024 and sell it today you would lose (935.00) from holding ProPhase Labs or give up 92.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
LumiraDx vs. ProPhase Labs
Performance |
| Timeline |
| LumiraDx |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProPhase Labs |
LumiraDx and ProPhase Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LumiraDx and ProPhase Labs
The main advantage of trading using opposite LumiraDx and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LumiraDx 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.| LumiraDx vs. Fonar | LumiraDx vs. Burning Rock Biotech | LumiraDx vs. Sera Prognostics | LumiraDx vs. Exagen Inc |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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