Correlation Between PNC Financial and Touchmark Bancshares
Can any of the company-specific risk be diversified away by investing in both PNC Financial and Touchmark Bancshares 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 Touchmark Bancshares 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 Touchmark Bancshares, you can compare the effects of market volatilities on PNC Financial and Touchmark Bancshares 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 Touchmark Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Touchmark Bancshares.
Diversification Opportunities for PNC Financial and Touchmark Bancshares
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PNC and Touchmark is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Touchmark Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchmark Bancshares 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 Touchmark Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchmark Bancshares has no effect on the direction of PNC Financial i.e., PNC Financial and Touchmark Bancshares go up and down completely randomly.
Pair Corralation between PNC Financial and Touchmark Bancshares
Considering the 90-day investment horizon PNC Financial Services is expected to generate 1.24 times more return on investment than Touchmark Bancshares. However, PNC Financial is 1.24 times more volatile than Touchmark Bancshares. It trades about 0.16 of its potential returns per unit of risk. Touchmark Bancshares is currently generating about -0.13 per unit of risk. If you would invest 18,297 in PNC Financial Services on September 2, 2024 and sell it today you would earn a total of 3,175 from holding PNC Financial Services or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PNC Financial Services vs. Touchmark Bancshares
Performance |
| Timeline |
| PNC Financial Services |
| Touchmark Bancshares |
PNC Financial and Touchmark Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Touchmark Bancshares
The main advantage of trading using opposite PNC Financial and Touchmark Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, Touchmark Bancshares 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 Touchmark Bancshares will offset losses from the drop in Touchmark Bancshares' long position.| PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial vs. Zions Bancorporation |
| Touchmark Bancshares vs. Piraeus Bank SA | Touchmark Bancshares vs. Turkiye Garanti Bankasi | Touchmark Bancshares vs. Uwharrie Capital Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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