Correlation Between Petrus Resources and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Petrus Resources 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 Petrus Resources and Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrus Resources and Southern Cross Media, you can compare the effects of market volatilities on Petrus Resources 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 Petrus Resources with a short position of Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrus Resources and Southern Cross.
Diversification Opportunities for Petrus Resources and Southern Cross
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrus and Southern is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Petrus Resources 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 Petrus Resources 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 Petrus Resources 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 Petrus Resources i.e., Petrus Resources and Southern Cross go up and down completely randomly.
Pair Corralation between Petrus Resources and Southern Cross
Assuming the 90 days horizon Petrus Resources is expected to under-perform the Southern Cross. But the pink sheet apears to be less risky and, when comparing its historical volatility, Petrus Resources is 2.06 times less risky than Southern Cross. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Southern Cross Media is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 9.73 in Southern Cross Media on November 3, 2024 and sell it today you would earn a total of 1.27 from holding Southern Cross Media or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrus Resources vs. Southern Cross Media
Performance |
| Timeline |
| Petrus Resources |
| Southern Cross Media |
Petrus Resources and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrus Resources and Southern Cross
The main advantage of trading using opposite Petrus Resources and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrus Resources 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.| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
| Southern Cross vs. Pieridae Energy Limited | Southern Cross vs. Prospera Energy | Southern Cross vs. Ngx Energy International | Southern Cross vs. Barrister Energy LLC |
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 Stocks Directory module to find actively traded stocks across global markets.
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