Correlation Between Societe Generale and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Societe Generale and PNC Financial 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 Societe Generale and PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale ADR and PNC Financial Services, you can compare the effects of market volatilities on Societe Generale and PNC Financial 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 Societe Generale with a short position of PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and PNC Financial.
Diversification Opportunities for Societe Generale and PNC Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Societe and PNC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale ADR and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services and Societe Generale 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 Societe Generale ADR are associated (or correlated) with PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Societe Generale i.e., Societe Generale and PNC Financial go up and down completely randomly.
Pair Corralation between Societe Generale and PNC Financial
Assuming the 90 days horizon Societe Generale is expected to generate 1.45 times less return on investment than PNC Financial. In addition to that, Societe Generale is 1.11 times more volatile than PNC Financial Services. It trades about 0.03 of its total potential returns per unit of risk. PNC Financial Services is currently generating about 0.05 per unit of volatility. If you would invest 14,397 in PNC Financial Services on September 2, 2024 and sell it today you would earn a total of 7,075 from holding PNC Financial Services or generate 49.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe Generale ADR vs. PNC Financial Services
Performance |
| Timeline |
| Societe Generale ADR |
| PNC Financial Services |
Societe Generale and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and PNC Financial
The main advantage of trading using opposite Societe Generale and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Societe Generale vs. BNP Paribas SA | Societe Generale vs. Credit Agricole SA | Societe Generale vs. Intesa Sanpaolo SpA | Societe Generale vs. Commerzbank AG PK |
| PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial vs. Zions Bancorporation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |