Correlation Between Profound Medical and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Profound Medical and Ascot Resources 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 Profound Medical and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profound Medical Corp and Ascot Resources, you can compare the effects of market volatilities on Profound Medical and Ascot Resources 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 Profound Medical with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Ascot Resources.
Diversification Opportunities for Profound Medical and Ascot Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Profound and Ascot is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Profound Medical 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 Profound Medical Corp are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Profound Medical i.e., Profound Medical and Ascot Resources go up and down completely randomly.
Pair Corralation between Profound Medical and Ascot Resources
Assuming the 90 days trading horizon Profound Medical Corp is expected to generate 0.31 times more return on investment than Ascot Resources. However, Profound Medical Corp is 3.2 times less risky than Ascot Resources. It trades about -0.02 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.07 per unit of risk. If you would invest 1,124 in Profound Medical Corp on December 4, 2024 and sell it today you would lose (113.00) from holding Profound Medical Corp or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. Ascot Resources
Performance |
| Timeline |
| Profound Medical Corp |
| Ascot Resources |
Profound Medical and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and Ascot Resources
The main advantage of trading using opposite Profound Medical and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Profound Medical vs. HLS Therapeutics | Profound Medical vs. Medicenna Therapeutics Corp | Profound Medical vs. Aptose Biosciences |
| Ascot Resources vs. Major Drilling Group | Ascot Resources vs. Titanium Transportation Group | Ascot Resources vs. Plaza Retail REIT | Ascot Resources vs. NeXGold Mining Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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