Correlation Between ProPhase Labs and XTL Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and XTL Biopharmaceutica 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 XTL Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPhase Labs and XTL Biopharmaceuticals Ltd, you can compare the effects of market volatilities on ProPhase Labs and XTL Biopharmaceutica 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 XTL Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and XTL Biopharmaceutica.
Diversification Opportunities for ProPhase Labs and XTL Biopharmaceutica
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProPhase and XTL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and XTL Biopharmaceuticals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals 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 XTL Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTL Biopharmaceuticals has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and XTL Biopharmaceutica go up and down completely randomly.
Pair Corralation between ProPhase Labs and XTL Biopharmaceutica
Given the investment horizon of 90 days ProPhase Labs is expected to under-perform the XTL Biopharmaceutica. But the stock apears to be less risky and, when comparing its historical volatility, ProPhase Labs is 1.84 times less risky than XTL Biopharmaceutica. The stock trades about -0.11 of its potential returns per unit of risk. The XTL Biopharmaceuticals Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 105.00 in XTL Biopharmaceuticals Ltd on August 26, 2024 and sell it today you would earn a total of 83.00 from holding XTL Biopharmaceuticals Ltd or generate 79.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
ProPhase Labs vs. XTL Biopharmaceuticals Ltd
Performance |
| Timeline |
| ProPhase Labs |
| XTL Biopharmaceuticals |
ProPhase Labs and XTL Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPhase Labs and XTL Biopharmaceutica
The main advantage of trading using opposite ProPhase Labs and XTL Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, XTL Biopharmaceutica 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 XTL Biopharmaceutica will offset losses from the drop in XTL Biopharmaceutica's long position.| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
| XTL Biopharmaceutica vs. Benitec Biopharma Ltd | XTL Biopharmaceutica vs. Xenetic Biosciences | XTL Biopharmaceutica vs. ProPhase Labs | XTL Biopharmaceutica vs. BOS Better Online |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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