Correlation Between PNC Financial and Compagnie
Can any of the company-specific risk be diversified away by investing in both PNC Financial and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The PNC Financial and Compagnie de Saint Gobain, you can compare the effects of market volatilities on PNC Financial and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Compagnie.
Diversification Opportunities for PNC Financial and Compagnie
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PNC and Compagnie is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding The PNC Financial and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 The PNC Financial are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of PNC Financial i.e., PNC Financial and Compagnie go up and down completely randomly.
Pair Corralation between PNC Financial and Compagnie
Assuming the 90 days horizon PNC Financial is expected to generate 1.58 times less return on investment than Compagnie. In addition to that, PNC Financial is 1.1 times more volatile than Compagnie de Saint Gobain. It trades about 0.12 of its total potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.21 per unit of volatility. If you would invest 8,562 in Compagnie de Saint Gobain on November 5, 2024 and sell it today you would earn a total of 498.00 from holding Compagnie de Saint Gobain or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The PNC Financial vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| PNC Financial |
| Compagnie de Saint |
PNC Financial and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Compagnie
The main advantage of trading using opposite PNC Financial and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| PNC Financial vs. TRADELINK ELECTRON | PNC Financial vs. Summit Hotel Properties | PNC Financial vs. The Trade Desk | PNC Financial vs. Indutrade AB |
| Compagnie vs. RCI Hospitality Holdings | Compagnie vs. Waste Management | Compagnie vs. Solstad Offshore ASA | Compagnie vs. Sims Metal Management |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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