The Australian study by Cotter in 1995 finds that the correlation between earnings and returns is lower over a five-year period than over a 10-year period.

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Cotter (1995)finds that the correlation coefficient between earnings and returns is 0.45 over a five-year period and 0.84 over a 10-year period.The correlation between cash flows from operations and share returns is lower.

The Australian Study by Cotter in 1995 Finds That the Correlation