Correlation Between American Funds and Pnc Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Pnc Emerging 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 American Funds and Pnc Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Pnc Emerging Markets, you can compare the effects of market volatilities on American Funds and Pnc Emerging 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 American Funds with a short position of Pnc Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Pnc Emerging.
Diversification Opportunities for American Funds and Pnc Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Pnc is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Pnc Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc Emerging Markets and American Funds 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 American Funds New are associated (or correlated) with Pnc Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc Emerging Markets has no effect on the direction of American Funds i.e., American Funds and Pnc Emerging go up and down completely randomly.
Pair Corralation between American Funds and Pnc Emerging
Assuming the 90 days horizon American Funds New is expected to generate 0.79 times more return on investment than Pnc Emerging. However, American Funds New is 1.27 times less risky than Pnc Emerging. It trades about -0.19 of its potential returns per unit of risk. Pnc Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 8,351 in American Funds New on August 28, 2024 and sell it today you would lose (226.00) from holding American Funds New or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds New vs. Pnc Emerging Markets
Performance |
| Timeline |
| American Funds New |
| Pnc Emerging Markets |
American Funds and Pnc Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Pnc Emerging
The main advantage of trading using opposite American Funds and Pnc Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Pnc Emerging 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 Emerging will offset losses from the drop in Pnc Emerging's long position.| American Funds vs. Income Fund Of | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund | American Funds vs. American Funds Income |
| Pnc Emerging vs. Federated Emerging Market | Pnc Emerging vs. Federated Mdt All | Pnc Emerging vs. Federated Mdt Balanced | Pnc Emerging vs. Federated Global Allocation |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |