Correlation Between Profound Medical and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Profound Medical and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Profound Medical and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Globex Mining.
Diversification Opportunities for Profound Medical and Globex Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Profound and Globex is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Profound Medical i.e., Profound Medical and Globex Mining go up and down completely randomly.
Pair Corralation between Profound Medical and Globex Mining
Assuming the 90 days trading horizon Profound Medical Corp is expected to generate 1.78 times more return on investment than Globex Mining. However, Profound Medical is 1.78 times more volatile than Globex Mining Enterprises. It trades about 0.16 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.18 per unit of risk. If you would invest 1,015 in Profound Medical Corp on September 1, 2024 and sell it today you would earn a total of 129.00 from holding Profound Medical Corp or generate 12.71% 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. Globex Mining Enterprises
Performance |
| Timeline |
| Profound Medical Corp |
| Globex Mining Enterprises |
Profound Medical and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and Globex Mining
The main advantage of trading using opposite Profound Medical and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Profound Medical vs. Orca Energy Group | Profound Medical vs. Rogers Communications | Profound Medical vs. Aclara Resources | Profound Medical vs. Greenfire Resources |
| Globex Mining vs. Chibougamau Independent Mines | Globex Mining vs. Entree Resources | Globex Mining vs. Solitario Exploration Royalty | Globex Mining vs. Forsys Metals 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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