Correlation Between Profound Medical and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Profound Medical and Abbott Laboratories 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 Abbott Laboratories 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 Abbott Laboratories, you can compare the effects of market volatilities on Profound Medical and Abbott Laboratories 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 Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and Abbott Laboratories.
Diversification Opportunities for Profound Medical and Abbott Laboratories
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Profound and Abbott is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories 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 Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Profound Medical i.e., Profound Medical and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Profound Medical and Abbott Laboratories
Assuming the 90 days trading horizon Profound Medical Corp is expected to generate 3.25 times more return on investment than Abbott Laboratories. However, Profound Medical is 3.25 times more volatile than Abbott Laboratories. It trades about 0.17 of its potential returns per unit of risk. Abbott Laboratories is currently generating about -0.02 per unit of risk. If you would invest 835.00 in Profound Medical Corp on October 5, 2025 and sell it today you would earn a total of 220.00 from holding Profound Medical Corp or generate 26.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. Abbott Laboratories
Performance |
| Timeline |
| Profound Medical Corp |
| Abbott Laboratories |
Profound Medical and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and Abbott Laboratories
The main advantage of trading using opposite Profound Medical and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Profound Medical vs. NervGen Pharma Corp | Profound Medical vs. Medical Facilities | Profound Medical vs. Eupraxia Pharmaceuticals | Profound Medical vs. CareRx Corp |
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Check out your portfolio center.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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