Correlation Between Perseus Mining and Profound Medical

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

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

Diversification Opportunities for Perseus Mining and Profound Medical

0.37

Correlation Coefficient

Perseus Mining  Profound Medical

Weak diversification

The 3 months correlation between Perseus and Profound is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining 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 Perseus Mining 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 Perseus Mining 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 Perseus Mining i.e., Perseus Mining and Profound Medical go up and down completely randomly.

Pair Corralation between Perseus Mining and Profound Medical

Assuming the 90 days trading horizon Perseus Mining is expected to generate 3.88 times less return on investment than Profound Medical. But when comparing it to its historical volatility, Perseus Mining is 1.74 times less risky than Profound Medical. It trades about 0.04 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  641.00  in Profound Medical Corp on April 20, 2025 and sell it today you would earn a total of  125.00  from holding Profound Medical Corp or generate 19.5% return on investment over 90 days.

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

Perseus Mining  vs.  Profound Medical Corp

Perseus Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Perseus Mining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Profound Medical Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Profound Medical Corp are ranked lower than 6 (%) 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 Perseus Mining and Profound Medical

The main advantage of trading using opposite Perseus Mining and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining 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 Perseus Mining 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.