Correlation Between Cooper Metals and Pro Medicus

Can any of the company-specific risk be diversified away by investing in both Cooper Metals and Pro Medicus 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 Cooper Metals and Pro Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cooper Metals and Pro Medicus, you can compare the effects of market volatilities on Cooper Metals and Pro Medicus 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 Cooper Metals with a short position of Pro Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and Pro Medicus.

Diversification Opportunities for Cooper Metals and Pro Medicus

0.71

Correlation Coefficient

Cooper Metals  Pro Medicus

Poor diversification

The 3 months correlation between Cooper and Pro is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and Pro Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Medicus and Cooper Metals 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 Cooper Metals are associated (or correlated) with Pro Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Medicus has no effect on the direction of Cooper Metals i.e., Cooper Metals and Pro Medicus go up and down completely randomly.

Pair Corralation between Cooper Metals and Pro Medicus

Assuming the 90 days trading horizon Cooper Metals is expected to generate 1.51 times more return on investment than Pro Medicus. However, Cooper Metals is 1.51 times more volatile than Pro Medicus. It trades about -0.03 of its potential returns per unit of risk. Pro Medicus is currently generating about -0.1 per unit of risk. If you would invest  4.45  in Cooper Metals on December 28, 2024 and sell it today you would lose (0.55) from holding Cooper Metals or give up 12.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Cooper Metals  vs.  Pro Medicus

Cooper Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cooper Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pro Medicus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pro Medicus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cooper Metals and Pro Medicus

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

The idea behind Cooper Metals and Pro Medicus 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.