Correlation Between Profound Medical and CVRx
Can any of the company-specific risk be diversified away by investing in both Profound Medical and CVRx 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 CVRx 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 CVRx Inc, you can compare the effects of market volatilities on Profound Medical and CVRx 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 CVRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and CVRx.
Diversification Opportunities for Profound Medical and CVRx
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Profound and CVRx is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx Inc 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 CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of Profound Medical i.e., Profound Medical and CVRx go up and down completely randomly.
Pair Corralation between Profound Medical and CVRx
Given the investment horizon of 90 days Profound Medical is expected to generate 487.2 times less return on investment than CVRx. But when comparing it to its historical volatility, Profound Medical Corp is 1.71 times less risky than CVRx. It trades about 0.0 of its potential returns per unit of risk. CVRx Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,491 in CVRx Inc on September 3, 2024 and sell it today you would earn a total of 61.00 from holding CVRx Inc or generate 4.09% 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. CVRx Inc
Performance |
| Timeline |
| Profound Medical Corp |
| CVRx Inc |
Profound Medical and CVRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and CVRx
The main advantage of trading using opposite Profound Medical and CVRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, CVRx 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 CVRx will offset losses from the drop in CVRx's long position.| Profound Medical vs. Si Bone | Profound Medical vs. Sight Sciences | Profound Medical vs. Nevro Corp | Profound Medical vs. Paragon 28 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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