Correlation Between Premium Income and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Premium Income 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 Premium Income and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and Profound Medical Corp, you can compare the effects of market volatilities on Premium Income 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 Premium Income with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Profound Medical.
Diversification Opportunities for Premium Income and Profound Medical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premium and Profound is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income 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 Premium Income 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 Premium Income 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 Premium Income i.e., Premium Income and Profound Medical go up and down completely randomly.
Pair Corralation between Premium Income and Profound Medical
Assuming the 90 days trading horizon Premium Income is expected to generate 0.42 times more return on investment than Profound Medical. However, Premium Income is 2.38 times less risky than Profound Medical. It trades about -0.07 of its potential returns per unit of risk. Profound Medical Corp is currently generating about -0.1 per unit of risk. If you would invest 642.00 in Premium Income on September 13, 2024 and sell it today you would lose (10.00) from holding Premium Income or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. Profound Medical Corp
Performance |
| Timeline |
| Premium Income |
| Profound Medical Corp |
Premium Income and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and Profound Medical
The main advantage of trading using opposite Premium Income and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income 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.| Premium Income vs. Berkshire Hathaway CDR | Premium Income vs. E L Financial Corp | Premium Income vs. E L Financial 3 | Premium Income vs. Molson Coors Canada |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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