Correlation Between Beyond Air and Profound Medical

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

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

Diversification Opportunities for Beyond Air and Profound Medical

0.14

Correlation Coefficient

Beyond Air  Profound Medical

Average diversification

The 3 months correlation between Beyond and Profound is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air 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 Beyond Air 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 Beyond Air 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 Beyond Air i.e., Beyond Air and Profound Medical go up and down completely randomly.

Pair Corralation between Beyond Air and Profound Medical

Given the investment horizon of 90 days Beyond Air is expected to under-perform the Profound Medical. In addition to that, Beyond Air is 1.92 times more volatile than Profound Medical Corp. It trades about -0.04 of its total potential returns per unit of risk. Profound Medical Corp is currently generating about 0.01 per unit of volatility. If you would invest  905.00  in Profound Medical Corp on September 3, 2024 and sell it today you would lose (64.00) from holding Profound Medical Corp or give up 7.07% of portfolio value over 90 days.

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

Beyond Air  vs.  Profound Medical Corp

Beyond Air

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Air are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward indicators, Beyond Air reported solid returns over the last few months and may actually be approaching a breakup point.

Profound Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Profound Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Profound Medical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Beyond Air and Profound Medical

The main advantage of trading using opposite Beyond Air and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air 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 Beyond Air 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.