Correlation Between BOS Better and ProPhase Labs

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

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

Diversification Opportunities for BOS Better and ProPhase Labs

-0.9

Correlation Coefficient

BOS Better  ProPhase Labs

Pay attention - limited upside

The 3 months correlation between BOS and ProPhase is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and ProPhase Labs go up and down completely randomly.

Pair Corralation between BOS Better and ProPhase Labs

Given the investment horizon of 90 days BOS Better Online is expected to generate 0.34 times more return on investment than ProPhase Labs. However, BOS Better Online is 2.95 times less risky than ProPhase Labs. It trades about 0.03 of its potential returns per unit of risk. ProPhase Labs is currently generating about -0.11 per unit of risk. If you would invest  293.00  in BOS Better Online on September 28, 2024 and sell it today you would earn a total of  36.00  from holding BOS Better Online or generate 12.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.63%
Values	Daily Returns

BOS Better Online  vs.  ProPhase Labs

BOS Better Online

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with BOS Better and ProPhase Labs

The main advantage of trading using opposite BOS Better and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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 BOS Better Online 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 Stocks Directory module to find actively traded stocks across global markets.