Correlation Between Profound Medical and E Split
Can any of the company-specific risk be diversified away by investing in both Profound Medical and E Split 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 E Split 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 E Split Corp, you can compare the effects of market volatilities on Profound Medical and E Split 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 E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and E Split.
Diversification Opportunities for Profound Medical and E Split
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Profound and ENS-PA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split Corp 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 E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of Profound Medical i.e., Profound Medical and E Split go up and down completely randomly.
Pair Corralation between Profound Medical and E Split
Assuming the 90 days trading horizon Profound Medical is expected to generate 4.33 times less return on investment than E Split. In addition to that, Profound Medical is 4.4 times more volatile than E Split Corp. It trades about 0.03 of its total potential returns per unit of risk. E Split Corp is currently generating about 0.49 per unit of volatility. If you would invest 1,050 in E Split Corp on September 3, 2024 and sell it today you would earn a total of 85.00 from holding E Split Corp or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. E Split Corp
Performance |
| Timeline |
| Profound Medical Corp |
| E Split Corp |
Profound Medical and E Split Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and E Split
The main advantage of trading using opposite Profound Medical and E Split positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, E Split 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 E Split will offset losses from the drop in E Split's long position.| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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