Correlation Between Pinnacle Investment and Pro Medicus

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

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

Diversification Opportunities for Pinnacle Investment and Pro Medicus

0.97

Correlation Coefficient

Pinnacle Investment  Pro Medicus

Almost no diversification

The 3 months correlation between Pinnacle and Pro is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Pro Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Medicus and Pinnacle Investment 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 Pinnacle Investment Management 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 Pinnacle Investment i.e., Pinnacle Investment and Pro Medicus go up and down completely randomly.

Pair Corralation between Pinnacle Investment and Pro Medicus

Assuming the 90 days trading horizon Pinnacle Investment is expected to generate 1.41 times less return on investment than Pro Medicus. But when comparing it to its historical volatility, Pinnacle Investment Management is 1.14 times less risky than Pro Medicus. It trades about 0.32 of its potential returns per unit of risk. Pro Medicus is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  15,039  in Pro Medicus on September 4, 2024 and sell it today you would earn a total of  9,844  from holding Pro Medicus or generate 65.46% return on investment over 90 days.

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

Pinnacle Investment Management  vs.  Pro Medicus

Pinnacle Investment

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pinnacle Investment Management are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Pinnacle Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pro Medicus

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Medicus are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Pro Medicus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pinnacle Investment and Pro Medicus

The main advantage of trading using opposite Pinnacle Investment and Pro Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment 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 Pinnacle Investment Management 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.