Correlation Between ProPhase Labs and Intelligent Bio

Can any of the company-specific risk be diversified away by investing in both ProPhase Labs and Intelligent Bio 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 Intelligent Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProPhase Labs and Intelligent Bio Solutions, you can compare the effects of market volatilities on ProPhase Labs and Intelligent Bio 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 Intelligent Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPhase Labs and Intelligent Bio.

Diversification Opportunities for ProPhase Labs and Intelligent Bio

0.18

Correlation Coefficient

ProPhase Labs  Intelligent Bio

Average diversification

The 3 months correlation between ProPhase and Intelligent is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ProPhase Labs and Intelligent Bio Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Bio Solutions 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 Intelligent Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Bio Solutions has no effect on the direction of ProPhase Labs i.e., ProPhase Labs and Intelligent Bio go up and down completely randomly.

Pair Corralation between ProPhase Labs and Intelligent Bio

Given the investment horizon of 90 days ProPhase Labs is expected to under-perform the Intelligent Bio. But the stock apears to be less risky and, when comparing its historical volatility, ProPhase Labs is 1.4 times less risky than Intelligent Bio. The stock trades about -0.17 of its potential returns per unit of risk. The Intelligent Bio Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  141.00  in Intelligent Bio Solutions on September 17, 2024 and sell it today you would earn a total of  8.00  from holding Intelligent Bio Solutions or generate 5.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ProPhase Labs  vs.  Intelligent Bio Solutions

ProPhase Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProPhase Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Intelligent Bio Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Bio Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ProPhase Labs and Intelligent Bio

The main advantage of trading using opposite ProPhase Labs and Intelligent Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPhase Labs position performs unexpectedly, Intelligent Bio 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 Intelligent Bio will offset losses from the drop in Intelligent Bio's long position.

The idea behind ProPhase Labs and Intelligent Bio Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.