Correlation Between Knight Therapeutics and Profound Medical

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

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

Diversification Opportunities for Knight Therapeutics and Profound Medical

-0.7

Correlation Coefficient

Knight Therapeutics  Profound Medical

Excellent diversification

The 3 months correlation between Knight and Profound is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics 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 Knight Therapeutics 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 Knight Therapeutics 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 Knight Therapeutics i.e., Knight Therapeutics and Profound Medical go up and down completely randomly.

Pair Corralation between Knight Therapeutics and Profound Medical

Assuming the 90 days trading horizon Knight Therapeutics is expected to under-perform the Profound Medical. But the stock apears to be less risky and, when comparing its historical volatility, Knight Therapeutics is 5.8 times less risky than Profound Medical. The stock trades about 0.0 of its potential returns per unit of risk. The Profound Medical Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  789.00  in Profound Medical Corp on August 4, 2025 and sell it today you would earn a total of  47.00  from holding Profound Medical Corp or generate 5.96% return on investment over 90 days.

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

Knight Therapeutics  vs.  Profound Medical Corp

Knight Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Knight Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Profound Medical Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Profound Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Knight Therapeutics and Profound Medical

The main advantage of trading using opposite Knight Therapeutics and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics 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 Knight Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.