Correlation Between PNC Financial and BankUnited
Can any of the company-specific risk be diversified away by investing in both PNC Financial and BankUnited 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 PNC Financial and BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNC Financial Services and BankUnited, you can compare the effects of market volatilities on PNC Financial and BankUnited 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 PNC Financial with a short position of BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and BankUnited.
Diversification Opportunities for PNC Financial and BankUnited
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PNC and BankUnited is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited and PNC Financial 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 PNC Financial Services are associated (or correlated) with BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of PNC Financial i.e., PNC Financial and BankUnited go up and down completely randomly.
Pair Corralation between PNC Financial and BankUnited
Considering the 90-day investment horizon PNC Financial is expected to generate 1.07 times less return on investment than BankUnited. But when comparing it to its historical volatility, PNC Financial Services is 1.71 times less risky than BankUnited. It trades about 0.22 of its potential returns per unit of risk. BankUnited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,614 in BankUnited on August 30, 2024 and sell it today you would earn a total of 622.00 from holding BankUnited or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PNC Financial Services vs. BankUnited
Performance |
| Timeline |
| PNC Financial Services |
| BankUnited |
PNC Financial and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and BankUnited
The main advantage of trading using opposite PNC Financial and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial vs. Zions Bancorporation |
| BankUnited vs. SVB T Corp | BankUnited vs. First Capital | BankUnited vs. Pioneer Bankcorp | BankUnited vs. Liberty Northwest Bancorp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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