Correlation Between Bio Rad and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Bio Rad 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 Bio Rad and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Rad Laboratories and Profound Medical Corp, you can compare the effects of market volatilities on Bio Rad 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 Bio Rad with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Rad and Profound Medical.
Diversification Opportunities for Bio Rad and Profound Medical
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and Profound is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories 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 Bio Rad 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 Bio Rad Laboratories 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 Bio Rad i.e., Bio Rad and Profound Medical go up and down completely randomly.
Pair Corralation between Bio Rad and Profound Medical
Assuming the 90 days horizon Bio Rad is expected to generate 6.6 times less return on investment than Profound Medical. But when comparing it to its historical volatility, Bio Rad Laboratories is 26.03 times less risky than Profound Medical. It trades about 0.5 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 735.00 in Profound Medical Corp on September 2, 2024 and sell it today you would earn a total of 77.00 from holding Profound Medical Corp or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Bio Rad Laboratories vs. Profound Medical Corp
Performance |
| Timeline |
| Bio Rad Laboratories |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Profound Medical Corp |
Bio Rad and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Rad and Profound Medical
The main advantage of trading using opposite Bio Rad and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Rad 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.| Bio Rad vs. Profound Medical Corp | Bio Rad vs. Si Bone | Bio Rad vs. Nevro Corp | Bio Rad vs. Orthopediatrics Corp |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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