Correlation Between Plastic Omnium and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and PNC Financial Services, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and PNC Financial.
Diversification Opportunities for Plastic Omnium and PNC Financial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plastic and PNC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and PNC Financial go up and down completely randomly.
Pair Corralation between Plastic Omnium and PNC Financial
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.66 times more return on investment than PNC Financial. However, Plastic Omnium is 1.66 times more volatile than PNC Financial Services. It trades about 0.16 of its potential returns per unit of risk. PNC Financial Services is currently generating about -0.18 per unit of risk. If you would invest 986.00 in Plastic Omnium on October 11, 2024 and sell it today you would earn a total of 52.00 from holding Plastic Omnium or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. PNC Financial Services
Performance |
| Timeline |
| Plastic Omnium |
| PNC Financial Services |
Plastic Omnium and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and PNC Financial
The main advantage of trading using opposite Plastic Omnium and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Singapore Reinsurance | Plastic Omnium vs. Dentsply Sirona | Plastic Omnium vs. NEW MILLENNIUM IRON | Plastic Omnium vs. VIENNA INSURANCE GR |
| PNC Financial vs. Monument Mining Limited | PNC Financial vs. ELMOS SEMICONDUCTOR | PNC Financial vs. EIDESVIK OFFSHORE NK | PNC Financial vs. GALENA MINING LTD |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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