Correlation Between Intelligent Bio and ProPhase Labs

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

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

Diversification Opportunities for Intelligent Bio and ProPhase Labs

0.08

Correlation Coefficient

Intelligent Bio  ProPhase Labs

Significant diversification

The 3 months correlation between Intelligent and ProPhase is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Bio Solutions and ProPhase Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPhase Labs and Intelligent Bio 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 Intelligent Bio Solutions 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 Intelligent Bio i.e., Intelligent Bio and ProPhase Labs go up and down completely randomly.

Pair Corralation between Intelligent Bio and ProPhase Labs

Given the investment horizon of 90 days Intelligent Bio Solutions is expected to generate 2.6 times more return on investment than ProPhase Labs. However, Intelligent Bio is 2.6 times more volatile than ProPhase Labs. It trades about 0.02 of its potential returns per unit of risk. ProPhase Labs is currently generating about -0.11 per unit of risk. If you would invest  389.00  in Intelligent Bio Solutions on September 28, 2024 and sell it today you would lose (250.00) from holding Intelligent Bio Solutions or give up 64.27% of portfolio value over 90 days.

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

Intelligent Bio Solutions  vs.  ProPhase Labs

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 weak 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.

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 Intelligent Bio and ProPhase Labs

The main advantage of trading using opposite Intelligent Bio and ProPhase Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Bio 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 Intelligent Bio Solutions 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.