Correlation Between ProPhase Labs and Danaher
Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and Danaher 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 Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPhase Labs and Danaher, you can compare the effects of market volatilities on ProPhase Labs and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and Danaher.
Diversification Opportunities for ProPhase Labs and Danaher
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProPhase and Danaher is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and Danaher go up and down completely randomly.
Pair Corralation between ProPhase Labs and Danaher
Given the investment horizon of 90 days ProPhase Labs is expected to under-perform the Danaher. In addition to that, ProPhase Labs is 5.54 times more volatile than Danaher. It trades about -0.23 of its total potential returns per unit of risk. Danaher is currently generating about -0.16 per unit of volatility. If you would invest 27,222 in Danaher on September 12, 2024 and sell it today you would lose (3,788) from holding Danaher or give up 13.92% 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. Danaher
Performance |
| Timeline |
| ProPhase Labs |
| Danaher |
ProPhase Labs and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPhase Labs and Danaher
The main advantage of trading using opposite ProPhase Labs and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
| Danaher vs. Agilent Technologies | Danaher vs. Illumina | Danaher vs. IDEXX Laboratories | Danaher vs. Waters |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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