Correlation Between RadNet and ProPhase Labs
Can any of the company-specific risk be diversified away by investing in both RadNet and ProPhase Labs 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 RadNet and ProPhase Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and ProPhase Labs, you can compare the effects of market volatilities on RadNet and ProPhase Labs 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 RadNet with a short position of ProPhase Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and ProPhase Labs.
Diversification Opportunities for RadNet and ProPhase Labs
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RadNet and ProPhase is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and RadNet 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 RadNet Inc are associated (or correlated) with ProPhase Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPhase Labs has no effect on the direction of RadNet i.e., RadNet and ProPhase Labs go up and down completely randomly.
Pair Corralation between RadNet and ProPhase Labs
Given the investment horizon of 90 days RadNet Inc is expected to under-perform the ProPhase Labs. But the stock apears to be less risky and, when comparing its historical volatility, RadNet Inc is 5.87 times less risky than ProPhase Labs. The stock trades about -0.11 of its potential returns per unit of risk. The ProPhase Labs is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 45.00 in ProPhase Labs on November 27, 2024 and sell it today you would earn a total of 8.00 from holding ProPhase Labs or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. ProPhase Labs
Performance |
| Timeline |
| RadNet Inc |
| ProPhase Labs |
RadNet and ProPhase Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and ProPhase Labs
The main advantage of trading using opposite RadNet and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet position performs unexpectedly, ProPhase Labs 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 ProPhase Labs will offset losses from the drop in ProPhase Labs' long position.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| ProPhase Labs vs. Star Equity Holdings | ProPhase Labs vs. Enzo Biochem | ProPhase Labs vs. Neuronetics | ProPhase Labs vs. Intelligent Bio Solutions |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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