Correlation Between Forte Biosciences and Profound Medical

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

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

Diversification Opportunities for Forte Biosciences and Profound Medical

0.47

Correlation Coefficient

Forte Biosciences  Profound Medical

Very weak diversification

The 3 months correlation between Forte and Profound is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Forte Biosciences 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 Forte Biosciences 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 Forte Biosciences 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 Forte Biosciences i.e., Forte Biosciences and Profound Medical go up and down completely randomly.

Pair Corralation between Forte Biosciences and Profound Medical

Given the investment horizon of 90 days Forte Biosciences is expected to generate 1.73 times less return on investment than Profound Medical. In addition to that, Forte Biosciences is 1.16 times more volatile than Profound Medical Corp. It trades about 0.08 of its total potential returns per unit of risk. Profound Medical Corp is currently generating about 0.16 per unit of volatility. If you would invest  458.00  in Profound Medical Corp on August 19, 2025 and sell it today you would earn a total of  227.00  from holding Profound Medical Corp or generate 49.56% return on investment over 90 days.

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

Forte Biosciences  vs.  Profound Medical Corp

Forte Biosciences

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Forte Biosciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Forte Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Profound Medical Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Profound Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forte Biosciences and Profound Medical

The main advantage of trading using opposite Forte Biosciences and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forte Biosciences 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 Forte Biosciences 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..