Correlation Between Advent Wireless and Profound Medical

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

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

Diversification Opportunities for Advent Wireless and Profound Medical

-0.13

Correlation Coefficient

Advent Wireless  Profound Medical

Good diversification

The 3 months correlation between Advent and Profound is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless 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 Advent Wireless 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 Advent Wireless 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 Advent Wireless i.e., Advent Wireless and Profound Medical go up and down completely randomly.

Pair Corralation between Advent Wireless and Profound Medical

Assuming the 90 days horizon Advent Wireless is expected to under-perform the Profound Medical. But the stock apears to be less risky and, when comparing its historical volatility, Advent Wireless is 1.59 times less risky than Profound Medical. The stock trades about -0.07 of its potential returns per unit of risk. The Profound Medical Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  657.00  in Profound Medical Corp on April 24, 2025 and sell it today you would earn a total of  141.00  from holding Profound Medical Corp or generate 21.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Advent Wireless  vs.  Profound Medical Corp

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Profound Medical Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Profound Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Wireless and Profound Medical

The main advantage of trading using opposite Advent Wireless and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Wireless 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 Advent Wireless 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..