Correlation Between PNC Financial and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both PNC Financial and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on PNC Financial and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Dairy Farm.
Diversification Opportunities for PNC Financial and Dairy Farm
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PNC and Dairy is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of PNC Financial i.e., PNC Financial and Dairy Farm go up and down completely randomly.
Pair Corralation between PNC Financial and Dairy Farm
Assuming the 90 days trading horizon PNC Financial Services is expected to generate 0.66 times more return on investment than Dairy Farm. However, PNC Financial Services is 1.52 times less risky than Dairy Farm. It trades about 0.1 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.01 per unit of risk. If you would invest 10,601 in PNC Financial Services on November 8, 2024 and sell it today you would earn a total of 8,799 from holding PNC Financial Services or generate 83.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
PNC Financial Services vs. Dairy Farm International
Performance |
| Timeline |
| PNC Financial Services |
| Dairy Farm International |
PNC Financial and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Dairy Farm
The main advantage of trading using opposite PNC Financial and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc |
| Dairy Farm vs. SALESFORCE INC CDR | Dairy Farm vs. Air Transport Services | Dairy Farm vs. CANON MARKETING JP | Dairy Farm vs. AUTO TRADER ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world |