Correlation Between Profound Medical and Procept Biorobotics
Can any of the company-specific risk be diversified away by investing in both Profound Medical and Procept Biorobotics 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 Procept Biorobotics 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 Procept Biorobotics Corp, you can compare the effects of market volatilities on Profound Medical and Procept Biorobotics 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 Procept Biorobotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Procept Biorobotics.
Diversification Opportunities for Profound Medical and Procept Biorobotics
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Profound and Procept is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Procept Biorobotics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procept Biorobotics 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 Procept Biorobotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procept Biorobotics Corp has no effect on the direction of Profound Medical i.e., Profound Medical and Procept Biorobotics go up and down completely randomly.
Pair Corralation between Profound Medical and Procept Biorobotics
Given the investment horizon of 90 days Profound Medical Corp is expected to generate 1.51 times more return on investment than Procept Biorobotics. However, Profound Medical is 1.51 times more volatile than Procept Biorobotics Corp. It trades about 0.13 of its potential returns per unit of risk. Procept Biorobotics Corp is currently generating about 0.07 per unit of risk. If you would invest 735.00 in Profound Medical Corp on September 2, 2024 and sell it today you would earn a total of 77.00 from holding Profound Medical Corp or generate 10.48% 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. Procept Biorobotics Corp
Performance |
| Timeline |
| Profound Medical Corp |
| Procept Biorobotics Corp |
Profound Medical and Procept Biorobotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and Procept Biorobotics
The main advantage of trading using opposite Profound Medical and Procept Biorobotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Procept Biorobotics 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 Procept Biorobotics will offset losses from the drop in Procept Biorobotics' long position.| Profound Medical vs. Si Bone | Profound Medical vs. Sight Sciences | Profound Medical vs. Nevro Corp | Profound Medical vs. Paragon 28 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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