Correlation Between ProPhase Labs and Lonza Group
Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and Lonza Group 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 Lonza Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPhase Labs and Lonza Group AG, you can compare the effects of market volatilities on ProPhase Labs and Lonza Group 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 Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and Lonza Group.
Diversification Opportunities for ProPhase Labs and Lonza Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProPhase and Lonza is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and Lonza Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group AG 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group AG has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and Lonza Group go up and down completely randomly.
Pair Corralation between ProPhase Labs and Lonza Group
Given the investment horizon of 90 days ProPhase Labs is expected to under-perform the Lonza Group. In addition to that, ProPhase Labs is 4.67 times more volatile than Lonza Group AG. It trades about -0.23 of its total potential returns per unit of risk. Lonza Group AG is currently generating about -0.07 per unit of volatility. If you would invest 6,399 in Lonza Group AG on September 12, 2024 and sell it today you would lose (506.00) from holding Lonza Group AG or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
ProPhase Labs vs. Lonza Group AG
Performance |
| Timeline |
| ProPhase Labs |
| Lonza Group AG |
ProPhase Labs and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPhase Labs and Lonza Group
The main advantage of trading using opposite ProPhase Labs and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
| Lonza Group vs. Revvity | Lonza Group vs. Sonic Healthcare Limited | Lonza Group vs. Personalis | Lonza Group vs. Applied DNA Sciences |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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