Correlation Between Lamar Advertising and Profound Medical

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

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

Diversification Opportunities for Lamar Advertising and Profound Medical

0.19

Correlation Coefficient

Lamar Advertising  Profound Medical

Average diversification

The 3 months correlation between Lamar and Profound is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising i.e., Lamar Advertising and Profound Medical go up and down completely randomly.

Pair Corralation between Lamar Advertising and Profound Medical

Given the investment horizon of 90 days Lamar Advertising is expected to generate 11.39 times less return on investment than Profound Medical. But when comparing it to its historical volatility, Lamar Advertising is 3.73 times less risky than Profound Medical. It trades about 0.07 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  387.00  in Profound Medical Corp on September 10, 2025 and sell it today you would earn a total of  291.00  from holding Profound Medical Corp or generate 75.19% return on investment over 90 days.

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

Lamar Advertising  vs.  Profound Medical Corp

Lamar Advertising

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Lamar Advertising are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Lamar Advertising is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Profound Medical Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 16 (%) 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 Lamar Advertising and Profound Medical

The main advantage of trading using opposite Lamar Advertising and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising 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 Lamar Advertising 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.