Correlation Between Profound Medical and Insulet
Can any of the company-specific risk be diversified away by investing in both Profound Medical and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on Profound Medical and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Insulet.
Diversification Opportunities for Profound Medical and Insulet
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Profound and Insulet is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of Profound Medical i.e., Profound Medical and Insulet go up and down completely randomly.
Pair Corralation between Profound Medical and Insulet
Given the investment horizon of 90 days Profound Medical Corp is expected to generate 1.69 times more return on investment than Insulet. However, Profound Medical is 1.69 times more volatile than Insulet. It trades about 0.03 of its potential returns per unit of risk. Insulet is currently generating about 0.0 per unit of risk. If you would invest 727.00 in Profound Medical Corp on September 3, 2024 and sell it today you would earn a total of 85.00 from holding Profound Medical Corp or generate 11.69% 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. Insulet
Performance |
| Timeline |
| Profound Medical Corp |
| Insulet |
Profound Medical and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and Insulet
The main advantage of trading using opposite Profound Medical and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.| Profound Medical vs. Si Bone | Profound Medical vs. Sight Sciences | Profound Medical vs. Nevro Corp | Profound Medical vs. Paragon 28 |
| Insulet vs. DexCom Inc | Insulet vs. Integra LifeSciences Holdings | Insulet vs. Senseonics Holdings | Insulet vs. Edwards Lifesciences 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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