Correlation Between Profound Medical and TC Energy
Can any of the company-specific risk be diversified away by investing in both Profound Medical and TC Energy 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 TC Energy 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 TC Energy Corp, you can compare the effects of market volatilities on Profound Medical and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and TC Energy.
Diversification Opportunities for Profound Medical and TC Energy
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Profound and TRP-PC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of Profound Medical i.e., Profound Medical and TC Energy go up and down completely randomly.
Pair Corralation between Profound Medical and TC Energy
Assuming the 90 days trading horizon Profound Medical Corp is expected to under-perform the TC Energy. In addition to that, Profound Medical is 3.22 times more volatile than TC Energy Corp. It trades about -0.19 of its total potential returns per unit of risk. TC Energy Corp is currently generating about -0.19 per unit of volatility. If you would invest 1,576 in TC Energy Corp on December 30, 2024 and sell it today you would lose (62.00) from holding TC Energy Corp or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. TC Energy Corp
Performance |
| Timeline |
| Profound Medical Corp |
| TC Energy Corp |
Profound Medical and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and TC Energy
The main advantage of trading using opposite Profound Medical and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.| Profound Medical vs. HLS Therapeutics | Profound Medical vs. Medicenna Therapeutics Corp | Profound Medical vs. Aptose Biosciences |
| TC Energy vs. Manulife Financial Corp | TC Energy vs. TGS Esports | TC Energy vs. First National Financial | TC Energy vs. Definity Financial 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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