Correlation Between ProPhase Labs and Check Cap
Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and Check Cap 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 Check Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPhase Labs and Check Cap, you can compare the effects of market volatilities on ProPhase Labs and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and Check Cap.
Diversification Opportunities for ProPhase Labs and Check Cap
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProPhase and Check is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and Check Cap go up and down completely randomly.
Pair Corralation between ProPhase Labs and Check Cap
Given the investment horizon of 90 days ProPhase Labs is expected to under-perform the Check Cap. In addition to that, ProPhase Labs is 2.34 times more volatile than Check Cap. It trades about -0.41 of its total potential returns per unit of risk. Check Cap is currently generating about -0.33 per unit of volatility. If you would invest 118.00 in Check Cap on August 28, 2024 and sell it today you would lose (36.00) from holding Check Cap or give up 30.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProPhase Labs vs. Check Cap
Performance |
| Timeline |
| ProPhase Labs |
| Check Cap |
ProPhase Labs and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPhase Labs and Check Cap
The main advantage of trading using opposite ProPhase Labs and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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