Correlation Between Axogen and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Axogen and Profound Medical 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 Axogen and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axogen Inc and Profound Medical Corp, you can compare the effects of market volatilities on Axogen and Profound Medical 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 Axogen with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axogen and Profound Medical.
Diversification Opportunities for Axogen and Profound Medical
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axogen and Profound is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Axogen Inc and Profound Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profound Medical Corp and Axogen 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 Axogen Inc are associated (or correlated) with Profound Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profound Medical Corp has no effect on the direction of Axogen i.e., Axogen and Profound Medical go up and down completely randomly.
Pair Corralation between Axogen and Profound Medical
Given the investment horizon of 90 days Axogen Inc is expected to under-perform the Profound Medical. In addition to that, Axogen is 1.06 times more volatile than Profound Medical Corp. It trades about -0.01 of its total potential returns per unit of risk. Profound Medical Corp is currently generating about 0.02 per unit of volatility. If you would invest 754.00 in Profound Medical Corp on August 28, 2024 and sell it today you would lose (2.00) from holding Profound Medical Corp or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axogen Inc vs. Profound Medical Corp
Performance |
| Timeline |
| Axogen Inc |
| Profound Medical Corp |
Axogen and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axogen and Profound Medical
The main advantage of trading using opposite Axogen and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axogen position performs unexpectedly, Profound Medical 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 Profound Medical will offset losses from the drop in Profound Medical's long position.The idea behind Axogen Inc and Profound Medical Corp 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.| Profound Medical vs. Si Bone | Profound Medical vs. Sight Sciences | Profound Medical vs. Nevro Corp | Profound Medical vs. Paragon 28 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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