Correlation Between Hua Hong and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Hua Hong and PNC Financial 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 Hua Hong and PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and PNC Financial Services, you can compare the effects of market volatilities on Hua Hong and PNC Financial 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 Hua Hong with a short position of PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and PNC Financial.
Diversification Opportunities for Hua Hong and PNC Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hua and PNC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Hua Hong i.e., Hua Hong and PNC Financial go up and down completely randomly.
Pair Corralation between Hua Hong and PNC Financial
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 2.46 times more return on investment than PNC Financial. However, Hua Hong is 2.46 times more volatile than PNC Financial Services. It trades about 0.08 of its potential returns per unit of risk. PNC Financial Services is currently generating about -0.08 per unit of risk. If you would invest 250.00 in Hua Hong Semiconductor on October 17, 2024 and sell it today you would earn a total of 18.00 from holding Hua Hong Semiconductor or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. PNC Financial Services
Performance |
| Timeline |
| Hua Hong Semiconductor |
| PNC Financial Services |
Hua Hong and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and PNC Financial
The main advantage of trading using opposite Hua Hong and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Hua Hong vs. Datadog | Hua Hong vs. MICRONIC MYDATA | Hua Hong vs. DETALION GAMES SA | Hua Hong vs. HOCHSCHILD MINING |
| PNC Financial vs. SILICON LABORATOR | PNC Financial vs. Hua Hong Semiconductor | PNC Financial vs. Mitsui Chemicals | PNC Financial vs. PTT Global Chemical |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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