Correlation Between East Side and Profound Medical
Can any of the company-specific risk be diversified away by investing in both East Side 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 East Side and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Side Games and Profound Medical Corp, you can compare the effects of market volatilities on East Side 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 East Side with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and Profound Medical.
Diversification Opportunities for East Side and Profound Medical
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between East and Profound is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games 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 East Side 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 East Side Games 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 East Side i.e., East Side and Profound Medical go up and down completely randomly.
Pair Corralation between East Side and Profound Medical
Assuming the 90 days trading horizon East Side Games is expected to under-perform the Profound Medical. In addition to that, East Side is 1.35 times more volatile than Profound Medical Corp. It trades about -0.03 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 1,115 in Profound Medical Corp on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Profound Medical Corp or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Side Games vs. Profound Medical Corp
Performance |
| Timeline |
| East Side Games |
| Profound Medical Corp |
East Side and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Side and Profound Medical
The main advantage of trading using opposite East Side and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Side 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.| East Side vs. Telus Corp | East Side vs. Toronto Dominion Bank | East Side vs. TC Energy Corp | East Side vs. Manulife Financial Corp |
| Profound Medical vs. HLS Therapeutics | Profound Medical vs. Medicenna Therapeutics Corp | Profound Medical vs. Aptose Biosciences |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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