Correlation Between Profound Medical and CVS HEALTH
Can any of the company-specific risk be diversified away by investing in both Profound Medical and CVS HEALTH 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 CVS HEALTH 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 CVS HEALTH CDR, you can compare the effects of market volatilities on Profound Medical and CVS HEALTH 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 CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profound Medical and CVS HEALTH.
Diversification Opportunities for Profound Medical and CVS HEALTH
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Profound and CVS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and CVS HEALTH CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH CDR 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 CVS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH CDR has no effect on the direction of Profound Medical i.e., Profound Medical and CVS HEALTH go up and down completely randomly.
Pair Corralation between Profound Medical and CVS HEALTH
Assuming the 90 days trading horizon Profound Medical Corp is expected to generate 3.23 times more return on investment than CVS HEALTH. However, Profound Medical is 3.23 times more volatile than CVS HEALTH CDR. It trades about 0.15 of its potential returns per unit of risk. CVS HEALTH CDR is currently generating about 0.09 per unit of risk. If you would invest 619.00 in Profound Medical Corp on September 2, 2025 and sell it today you would earn a total of 289.00 from holding Profound Medical Corp or generate 46.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profound Medical Corp vs. CVS HEALTH CDR
Performance |
| Timeline |
| Profound Medical Corp |
| CVS HEALTH CDR |
Profound Medical and CVS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profound Medical and CVS HEALTH
The main advantage of trading using opposite Profound Medical and CVS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profound Medical position performs unexpectedly, CVS HEALTH 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 CVS HEALTH will offset losses from the drop in CVS HEALTH's long position.| Profound Medical vs. Advent Wireless | Profound Medical vs. Falcon Energy Materials | Profound Medical vs. Data Communications Management | Profound Medical vs. E L Financial Corp |
| CVS HEALTH vs. Globex Mining Enterprises | CVS HEALTH vs. CubicFarm Systems Corp | CVS HEALTH vs. Canadian Utilities Limited | CVS HEALTH vs. Rogers Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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