Correlation Between Sientra and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Sientra and Profound Medical 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 Sientra and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sientra and Profound Medical Corp, you can compare the effects of market volatilities on Sientra and Profound Medical 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 Sientra with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sientra and Profound Medical.
Diversification Opportunities for Sientra and Profound Medical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sientra and Profound is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sientra and Profound Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profound Medical Corp and Sientra 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 Sientra are associated (or correlated) with Profound Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profound Medical Corp has no effect on the direction of Sientra i.e., Sientra and Profound Medical go up and down completely randomly.
Pair Corralation between Sientra and Profound Medical
Given the investment horizon of 90 days Sientra is expected to generate 2.04 times more return on investment than Profound Medical. However, Sientra is 2.04 times more volatile than Profound Medical Corp. It trades about 0.08 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.04 per unit of risk. If you would invest 265.00 in Sientra on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Sientra or generate 61.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Sientra vs. Profound Medical Corp
Performance |
| Timeline |
| Sientra |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Profound Medical Corp |
Sientra and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sientra and Profound Medical
The main advantage of trading using opposite Sientra and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sientra position performs unexpectedly, Profound Medical 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 Profound Medical will offset losses from the drop in Profound Medical's long position.The idea behind Sientra and Profound Medical Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |