Correlation Between Integra LifeSciences and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences 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 Integra LifeSciences and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra LifeSciences Holdings and Profound Medical Corp, you can compare the effects of market volatilities on Integra LifeSciences 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 Integra LifeSciences with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Profound Medical.
Diversification Opportunities for Integra LifeSciences and Profound Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integra and Profound is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings 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 Integra LifeSciences 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 Integra LifeSciences Holdings 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 Integra LifeSciences i.e., Integra LifeSciences and Profound Medical go up and down completely randomly.
Pair Corralation between Integra LifeSciences and Profound Medical
Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to under-perform the Profound Medical. But the stock apears to be less risky and, when comparing its historical volatility, Integra LifeSciences Holdings is 1.05 times less risky than Profound Medical. The stock trades about -0.05 of its potential returns per unit of risk. The Profound Medical Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Profound Medical Corp on September 2, 2024 and sell it today you would lose (188.00) from holding Profound Medical Corp or give up 18.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra LifeSciences Holdings vs. Profound Medical Corp
Performance |
| Timeline |
| Integra LifeSciences |
| Profound Medical Corp |
Integra LifeSciences and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra LifeSciences and Profound Medical
The main advantage of trading using opposite Integra LifeSciences and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences 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.| Integra LifeSciences vs. Profound Medical Corp | Integra LifeSciences vs. Si Bone | Integra LifeSciences vs. Nevro Corp | Integra LifeSciences 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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