Correlation Between Profound Medical and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both Profound Medical and GOLDMAN SACHS 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 GOLDMAN SACHS 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 GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Profound Medical and GOLDMAN SACHS 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 GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and GOLDMAN SACHS.
Diversification Opportunities for Profound Medical and GOLDMAN SACHS
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Profound and GOLDMAN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR 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 GOLDMAN SACHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS CDR has no effect on the direction of Profound Medical i.e., Profound Medical and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between Profound Medical and GOLDMAN SACHS
Assuming the 90 days trading horizon Profound Medical is expected to generate 2.47 times less return on investment than GOLDMAN SACHS. In addition to that, Profound Medical is 1.7 times more volatile than GOLDMAN SACHS CDR. It trades about 0.03 of its total potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.12 per unit of volatility. If you would invest 2,273 in GOLDMAN SACHS CDR on August 30, 2024 and sell it today you would earn a total of 721.00 from holding GOLDMAN SACHS CDR or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| Profound Medical Corp |
| GOLDMAN SACHS CDR |
Profound Medical and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and GOLDMAN SACHS
The main advantage of trading using opposite Profound Medical and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, GOLDMAN SACHS 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 GOLDMAN SACHS will offset losses from the drop in GOLDMAN SACHS's long position.| Profound Medical vs. Solar Alliance Energy | Profound Medical vs. Braille Energy Systems | Profound Medical vs. MedMira | Profound Medical vs. Lite Access Technologies |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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