Correlation Between Thermo Fisher and ProPhase Labs
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher 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 Thermo Fisher and ProPhase Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermo Fisher Scientific and ProPhase Labs, you can compare the effects of market volatilities on Thermo Fisher 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 Thermo Fisher with a short position of ProPhase Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and ProPhase Labs.
Diversification Opportunities for Thermo Fisher and ProPhase Labs
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thermo and ProPhase is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and Thermo Fisher 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 Thermo Fisher Scientific 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 Thermo Fisher i.e., Thermo Fisher and ProPhase Labs go up and down completely randomly.
Pair Corralation between Thermo Fisher and ProPhase Labs
Considering the 90-day investment horizon Thermo Fisher Scientific is expected to generate 0.11 times more return on investment than ProPhase Labs. However, Thermo Fisher Scientific is 8.81 times less risky than ProPhase Labs. It trades about -0.17 of its potential returns per unit of risk. ProPhase Labs is currently generating about -0.34 per unit of risk. If you would invest 55,547 in Thermo Fisher Scientific on September 4, 2024 and sell it today you would lose (2,552) from holding Thermo Fisher Scientific or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. ProPhase Labs
Performance |
| Timeline |
| Thermo Fisher Scientific |
| ProPhase Labs |
Thermo Fisher and ProPhase Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and ProPhase Labs
The main advantage of trading using opposite Thermo Fisher and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher 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.| Thermo Fisher vs. Agilent Technologies | Thermo Fisher vs. IDEXX Laboratories | Thermo Fisher vs. Illumina | Thermo Fisher vs. Waters |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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