Correlation Between ProPhase Labs and Applied DNA
Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and Applied DNA 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 ProPhase Labs and Applied DNA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPhase Labs and Applied DNA Sciences, you can compare the effects of market volatilities on ProPhase Labs and Applied DNA 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 ProPhase Labs with a short position of Applied DNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and Applied DNA.
Diversification Opportunities for ProPhase Labs and Applied DNA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProPhase and Applied is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and Applied DNA Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DNA Sciences and ProPhase Labs 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 ProPhase Labs are associated (or correlated) with Applied DNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DNA Sciences has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and Applied DNA go up and down completely randomly.
Pair Corralation between ProPhase Labs and Applied DNA
Given the investment horizon of 90 days ProPhase Labs is expected to generate 0.66 times more return on investment than Applied DNA. However, ProPhase Labs is 1.5 times less risky than Applied DNA. It trades about -0.23 of its potential returns per unit of risk. Applied DNA Sciences is currently generating about -0.21 per unit of risk. If you would invest 259.00 in ProPhase Labs on September 12, 2024 and sell it today you would lose (192.00) from holding ProPhase Labs or give up 74.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProPhase Labs vs. Applied DNA Sciences
Performance |
| Timeline |
| ProPhase Labs |
| Applied DNA Sciences |
ProPhase Labs and Applied DNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPhase Labs and Applied DNA
The main advantage of trading using opposite ProPhase Labs and Applied DNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, Applied DNA 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 Applied DNA will offset losses from the drop in Applied DNA's long position.| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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