Correlation Between Identillect Technologies and Profound Medical

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

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

Diversification Opportunities for Identillect Technologies and Profound Medical

0.0

Correlation Coefficient

Identillect Technologies  Profound Medical

Pay attention - limited upside

The 3 months correlation between Identillect and Profound is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Identillect Technologies Corp 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 Identillect Technologies 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 Identillect Technologies Corp 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 Identillect Technologies i.e., Identillect Technologies and Profound Medical go up and down completely randomly.

Pair Corralation between Identillect Technologies and Profound Medical

Given the investment horizon of 90 days Identillect Technologies Corp is expected to generate 6.61 times more return on investment than Profound Medical. However, Identillect Technologies is 6.61 times more volatile than Profound Medical Corp. It trades about 0.1 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.0 per unit of risk. If you would invest  1.00  in Identillect Technologies Corp on September 23, 2024 and sell it today you would lose (0.50) from holding Identillect Technologies Corp or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Identillect Technologies Corp  vs.  Profound Medical Corp

Identillect Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Identillect Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Identillect Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Profound Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Profound Medical is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Identillect Technologies and Profound Medical

The main advantage of trading using opposite Identillect Technologies and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identillect Technologies 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 Identillect Technologies Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.