Correlation Between SBI Investment and PNC Technologies

Can any of the company-specific risk be diversified away by investing in both SBI Investment and PNC Technologies 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 SBI Investment and PNC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SBI Investment KOREA and PNC Technologies co, you can compare the effects of market volatilities on SBI Investment and PNC Technologies 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 SBI Investment with a short position of PNC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and PNC Technologies.

Diversification Opportunities for SBI Investment and PNC Technologies

-0.29

Correlation Coefficient

SBI Investment  PNC Technologies

Very good diversification

The 3 months correlation between SBI and PNC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and PNC Technologies co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Technologies and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with PNC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Technologies has no effect on the direction of SBI Investment i.e., SBI Investment and PNC Technologies go up and down completely randomly.

Pair Corralation between SBI Investment and PNC Technologies

Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the PNC Technologies. In addition to that, SBI Investment is 1.06 times more volatile than PNC Technologies co. It trades about -0.03 of its total potential returns per unit of risk. PNC Technologies co is currently generating about -0.01 per unit of volatility. If you would invest  555,768  in PNC Technologies co on October 25, 2024 and sell it today you would lose (123,768) from holding PNC Technologies co or give up 22.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SBI Investment KOREA  vs.  PNC Technologies co

SBI Investment KOREA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Investment KOREA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SBI Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

PNC Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PNC Technologies co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PNC Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SBI Investment and PNC Technologies

The main advantage of trading using opposite SBI Investment and PNC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, PNC Technologies 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 Technologies will offset losses from the drop in PNC Technologies' long position.

The idea behind SBI Investment KOREA and PNC Technologies co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.