Correlation Between Integra LifeSciences and Profound Medical

Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences 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 Integra LifeSciences and Profound Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integra LifeSciences Holdings and Profound Medical Corp, you can compare the effects of market volatilities on Integra LifeSciences 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 Integra LifeSciences with a short position of Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Profound Medical.

Diversification Opportunities for Integra LifeSciences and Profound Medical

-0.56

Correlation Coefficient

Integra LifeSciences  Profound Medical

Excellent diversification

The 3 months correlation between Integra and Profound is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings 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 Integra LifeSciences 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 Integra LifeSciences Holdings 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 Integra LifeSciences i.e., Integra LifeSciences and Profound Medical go up and down completely randomly.

Pair Corralation between Integra LifeSciences and Profound Medical

Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to generate 1.12 times more return on investment than Profound Medical. However, Integra LifeSciences is 1.12 times more volatile than Profound Medical Corp. It trades about 0.0 of its potential returns per unit of risk. Profound Medical Corp is currently generating about -0.08 per unit of risk. If you would invest  2,247  in Integra LifeSciences Holdings on December 29, 2024 and sell it today you would lose (78.00) from holding Integra LifeSciences Holdings or give up 3.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Integra LifeSciences Holdings  vs.  Profound Medical Corp

Integra LifeSciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integra LifeSciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integra LifeSciences is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Profound Medical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profound Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Integra LifeSciences and Profound Medical

The main advantage of trading using opposite Integra LifeSciences and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences 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 Integra LifeSciences Holdings 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.