Correlation Between Profound Medical and Akoya Biosciences

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

Diversification Opportunities for Profound Medical and Akoya Biosciences

-0.11

Correlation Coefficient

Profound Medical  Akoya Biosciences

Good diversification

The 3 months correlation between Profound and Akoya is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Akoya Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoya Biosciences 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 Akoya Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoya Biosciences has no effect on the direction of Profound Medical i.e., Profound Medical and Akoya Biosciences go up and down completely randomly.

Pair Corralation between Profound Medical and Akoya Biosciences

Given the investment horizon of 90 days Profound Medical Corp is expected to under-perform the Akoya Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, Profound Medical Corp is 1.84 times less risky than Akoya Biosciences. The stock trades about -0.02 of its potential returns per unit of risk. The Akoya Biosciences is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Akoya Biosciences on September 3, 2024 and sell it today you would lose (18.00) from holding Akoya Biosciences or give up 7.56% of portfolio value over 90 days.

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

Profound Medical Corp  vs.  Akoya Biosciences

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.

Akoya Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akoya Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Akoya Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Profound Medical and Akoya Biosciences

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

The idea behind Profound Medical Corp and Akoya Biosciences 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.