Correlation Between United Natural and PNC Financial
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and The PNC Financial, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and PNC Financial.
Diversification Opportunities for United Natural and PNC Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and PNC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and The PNC Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial and United Natural 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 United Natural Foods 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 has no effect on the direction of United Natural i.e., United Natural and PNC Financial go up and down completely randomly.
Pair Corralation between United Natural and PNC Financial
Assuming the 90 days horizon United Natural Foods is expected to generate 2.71 times more return on investment than PNC Financial. However, United Natural is 2.71 times more volatile than The PNC Financial. It trades about 0.2 of its potential returns per unit of risk. The PNC Financial is currently generating about 0.2 per unit of risk. If you would invest 1,262 in United Natural Foods on August 28, 2024 and sell it today you would earn a total of 948.00 from holding United Natural Foods or generate 75.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
United Natural Foods vs. The PNC Financial
Performance |
| Timeline |
| United Natural Foods |
| PNC Financial |
United Natural and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and PNC Financial
The main advantage of trading using opposite United Natural and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
| PNC Financial vs. Superior Plus Corp | PNC Financial vs. NMI Holdings | PNC Financial vs. Origin Agritech | PNC Financial vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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