Correlation Between Profound Medical and Super Micro

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

Diversification Opportunities for Profound Medical and Super Micro

0.55

Correlation Coefficient

Profound Medical  Super Micro

Very weak diversification

The 3 months correlation between Profound and Super is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Profound Medical Corp and Super Micro Computer, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Micro Computer, 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 Super Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Micro Computer, has no effect on the direction of Profound Medical i.e., Profound Medical and Super Micro go up and down completely randomly.

Pair Corralation between Profound Medical and Super Micro

Assuming the 90 days trading horizon Profound Medical is expected to generate 1.54 times less return on investment than Super Micro. But when comparing it to its historical volatility, Profound Medical Corp is 1.05 times less risky than Super Micro. It trades about 0.09 of its potential returns per unit of risk. Super Micro Computer, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,197  in Super Micro Computer, on April 24, 2025 and sell it today you would earn a total of  463.00  from holding Super Micro Computer, or generate 38.68% return on investment over 90 days.

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

Profound Medical Corp  vs.  Super Micro Computer,

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.

Super Micro Computer,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Super Micro Computer, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Super Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Profound Medical and Super Micro

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

The idea behind Profound Medical Corp and Super Micro Computer, 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.