Correlation Between Pro Medicus and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Pro Medicus and Southern Cross 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 Pro Medicus and Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Medicus and Southern Cross Media, you can compare the effects of market volatilities on Pro Medicus and Southern Cross 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 Pro Medicus with a short position of Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Medicus and Southern Cross.
Diversification Opportunities for Pro Medicus and Southern Cross
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pro and Southern is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pro Medicus and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media and Pro Medicus 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 Pro Medicus are associated (or correlated) with Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of Pro Medicus i.e., Pro Medicus and Southern Cross go up and down completely randomly.
Pair Corralation between Pro Medicus and Southern Cross
Assuming the 90 days trading horizon Pro Medicus is expected to generate 0.71 times more return on investment than Southern Cross. However, Pro Medicus is 1.42 times less risky than Southern Cross. It trades about 0.15 of its potential returns per unit of risk. Southern Cross Media is currently generating about -0.03 per unit of risk. If you would invest 6,164 in Pro Medicus on October 11, 2024 and sell it today you would earn a total of 19,774 from holding Pro Medicus or generate 320.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Medicus vs. Southern Cross Media
Performance |
| Timeline |
| Pro Medicus |
| Southern Cross Media |
Pro Medicus and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Medicus and Southern Cross
The main advantage of trading using opposite Pro Medicus and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Medicus position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Pro Medicus vs. Dug Technology | Pro Medicus vs. Australian Unity Office | Pro Medicus vs. WiseTech Global Limited | Pro Medicus vs. Kip McGrath Education |
| Southern Cross vs. Aneka Tambang Tbk | Southern Cross vs. Commonwealth Bank | Southern Cross vs. Commonwealth Bank of | Southern Cross vs. Australia and New |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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