Correlation Between Paragon 28 and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Paragon 28 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 Paragon 28 and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and Profound Medical Corp, you can compare the effects of market volatilities on Paragon 28 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 Paragon 28 with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Profound Medical.
Diversification Opportunities for Paragon 28 and Profound Medical
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Paragon and Profound is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 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 Paragon 28 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 Paragon 28 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 Paragon 28 i.e., Paragon 28 and Profound Medical go up and down completely randomly.
Pair Corralation between Paragon 28 and Profound Medical
Considering the 90-day investment horizon Paragon 28 is expected to generate 0.79 times more return on investment than Profound Medical. However, Paragon 28 is 1.26 times less risky than Profound Medical. It trades about 0.19 of its potential returns per unit of risk. Profound Medical Corp is currently generating about -0.05 per unit of risk. If you would invest 1,031 in Paragon 28 on November 29, 2024 and sell it today you would earn a total of 269.00 from holding Paragon 28 or generate 26.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Paragon 28 vs. Profound Medical Corp
Performance |
Timeline |
Paragon 28 |
Profound Medical Corp |
Paragon 28 and Profound Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Paragon 28 and Profound Medical
The main advantage of trading using opposite Paragon 28 and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 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.Paragon 28 vs. Pulmonx Corp | Paragon 28 vs. Iradimed Co | Paragon 28 vs. Orthofix Medical | Paragon 28 vs. Neuropace |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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