Correlation Between PNC Financial and Caixabank
Can any of the company-specific risk be diversified away by investing in both PNC Financial and Caixabank 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 Caixabank 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 Caixabank SA ADR, you can compare the effects of market volatilities on PNC Financial and Caixabank 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 Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Caixabank.
Diversification Opportunities for PNC Financial and Caixabank
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PNC and Caixabank is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Caixabank SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA ADR 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 Caixabank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank SA ADR has no effect on the direction of PNC Financial i.e., PNC Financial and Caixabank go up and down completely randomly.
Pair Corralation between PNC Financial and Caixabank
Considering the 90-day investment horizon PNC Financial Services is expected to generate 0.8 times more return on investment than Caixabank. However, PNC Financial Services is 1.25 times less risky than Caixabank. It trades about 0.16 of its potential returns per unit of risk. Caixabank SA ADR is currently generating about 0.03 per unit of risk. If you would invest 15,366 in PNC Financial Services on September 3, 2024 and sell it today you would earn a total of 6,106 from holding PNC Financial Services or generate 39.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PNC Financial Services vs. Caixabank SA ADR
Performance |
| Timeline |
| PNC Financial Services |
| Caixabank SA ADR |
PNC Financial and Caixabank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Caixabank
The main advantage of trading using opposite PNC Financial and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, Caixabank 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 Caixabank will offset losses from the drop in Caixabank's long position.| PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial vs. Zions Bancorporation |
| Caixabank vs. Permanent TSB Group | Caixabank vs. Bank of Botetourt | Caixabank vs. Cashmere Valley Bank | Caixabank vs. Oak Valley 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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