Correlation Between Profound Medical and Seneca Foods

Can any of the company-specific risk be diversified away by investing in both Profound Medical and Seneca Foods 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 Seneca Foods 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 Seneca Foods, you can compare the effects of market volatilities on Profound Medical and Seneca Foods 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 Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Seneca Foods.

Diversification Opportunities for Profound Medical and Seneca Foods

-0.17

Correlation Coefficient

Profound Medical  Seneca Foods

Good diversification

The 3 months correlation between Profound and Seneca is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Seneca Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods 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 Seneca Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seneca Foods has no effect on the direction of Profound Medical i.e., Profound Medical and Seneca Foods go up and down completely randomly.

Pair Corralation between Profound Medical and Seneca Foods

Given the investment horizon of 90 days Profound Medical Corp is expected to generate 17.54 times more return on investment than Seneca Foods. However, Profound Medical is 17.54 times more volatile than Seneca Foods. It trades about 0.18 of its potential returns per unit of risk. Seneca Foods is currently generating about -0.12 per unit of risk. If you would invest  411.00  in Profound Medical Corp on September 6, 2025 and sell it today you would earn a total of  249.00  from holding Profound Medical Corp or generate 60.58% 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.  Seneca Foods

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 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Profound Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Seneca Foods

Risk-Adjusted Performance

Weakest

Over the last 90 days Seneca Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Seneca Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Profound Medical and Seneca Foods

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

The idea behind Profound Medical Corp and Seneca Foods 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.