Correlation Between Southern Cross and Pinnacle Investment
Can any of the company-specific risk be diversified away by investing in both Southern Cross and Pinnacle Investment 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 Southern Cross and Pinnacle Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and Pinnacle Investment Management, you can compare the effects of market volatilities on Southern Cross and Pinnacle Investment 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 Southern Cross with a short position of Pinnacle Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and Pinnacle Investment.
Diversification Opportunities for Southern Cross and Pinnacle Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and Pinnacle is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment and Southern Cross 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 Southern Cross Media are associated (or correlated) with Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of Southern Cross i.e., Southern Cross and Pinnacle Investment go up and down completely randomly.
Pair Corralation between Southern Cross and Pinnacle Investment
Assuming the 90 days trading horizon Southern Cross Media is expected to generate 1.33 times more return on investment than Pinnacle Investment. However, Southern Cross is 1.33 times more volatile than Pinnacle Investment Management. It trades about 0.09 of its potential returns per unit of risk. Pinnacle Investment Management is currently generating about 0.12 per unit of risk. If you would invest 55.00 in Southern Cross Media on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Southern Cross Media or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. Pinnacle Investment Management
Performance |
| Timeline |
| Southern Cross Media |
| Pinnacle Investment |
Southern Cross and Pinnacle Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and Pinnacle Investment
The main advantage of trading using opposite Southern Cross and Pinnacle Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross position performs unexpectedly, Pinnacle Investment 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 Pinnacle Investment will offset losses from the drop in Pinnacle Investment's long position.| Southern Cross vs. Farm Pride Foods | Southern Cross vs. Data3 | Southern Cross vs. Beston Global Food | Southern Cross vs. AiMedia Technologies |
| Pinnacle Investment vs. Arc Funds | Pinnacle Investment vs. Qbe Insurance Group | Pinnacle Investment vs. A1 Investments Resources | Pinnacle Investment vs. BKI 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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