Correlation Between Qiagen NV and ProPhase Labs

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

By analyzing existing cross correlation between Qiagen NV and ProPhase Labs, you can compare the effects of market volatilities on Qiagen NV 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 Qiagen NV with a short position of ProPhase Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qiagen NV and ProPhase Labs.

Diversification Opportunities for Qiagen NV and ProPhase Labs

0.52

Correlation Coefficient

Qiagen NV  ProPhase Labs

Very weak diversification

The 3 months correlation between Qiagen and ProPhase is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Qiagen NV and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and Qiagen NV 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 Qiagen NV 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 Qiagen NV i.e., Qiagen NV and ProPhase Labs go up and down completely randomly.

Pair Corralation between Qiagen NV and ProPhase Labs

Given the investment horizon of 90 days Qiagen NV is expected to under-perform the ProPhase Labs. But the stock apears to be less risky and, when comparing its historical volatility, Qiagen NV is 8.16 times less risky than ProPhase Labs. The stock trades about -0.13 of its potential returns per unit of risk. The ProPhase Labs is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  72.00  in ProPhase Labs on December 28, 2024 and sell it today you would lose (26.00) from holding ProPhase Labs or give up 36.11% of portfolio value over 90 days.

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

Qiagen NV  vs.  ProPhase Labs

Qiagen NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qiagen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

ProPhase Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProPhase Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ProPhase Labs is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Qiagen NV and ProPhase Labs

The main advantage of trading using opposite Qiagen NV and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qiagen NV 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.

The idea behind Qiagen NV and ProPhase Labs 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..