Correlation Between Profound Medical and Enerflex

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

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

Diversification Opportunities for Profound Medical and Enerflex

-0.38

Correlation Coefficient

Profound Medical  Enerflex

Very good diversification

The 3 months correlation between Profound and Enerflex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Profound Medical 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 Profound Medical Corp are associated (or correlated) with Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Profound Medical i.e., Profound Medical and Enerflex go up and down completely randomly.

Pair Corralation between Profound Medical and Enerflex

Assuming the 90 days trading horizon Profound Medical is expected to generate 1.84 times less return on investment than Enerflex. In addition to that, Profound Medical is 2.37 times more volatile than Enerflex. It trades about 0.07 of its total potential returns per unit of risk. Enerflex is currently generating about 0.3 per unit of volatility. If you would invest  1,100  in Enerflex on July 12, 2025 and sell it today you would earn a total of  507.00  from holding Enerflex or generate 46.09% return on investment over 90 days.

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

Profound Medical Corp  vs.  Enerflex

Profound Medical Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Profound Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Enerflex

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Enerflex displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Profound Medical and Enerflex

The main advantage of trading using opposite Profound Medical and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Enerflex 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 Enerflex will offset losses from the drop in Enerflex's long position.

The idea behind Profound Medical Corp and Enerflex 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.