Correlation Between PNC Technologies and RFTech

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

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

Diversification Opportunities for PNC Technologies and RFTech

0.07

Correlation Coefficient

PNC Technologies  RFTech

Significant diversification

The 3 months correlation between PNC and RFTech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PNC Technologies co and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and PNC Technologies 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 Technologies co are associated (or correlated) with RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of PNC Technologies i.e., PNC Technologies and RFTech go up and down completely randomly.

Pair Corralation between PNC Technologies and RFTech

Assuming the 90 days trading horizon PNC Technologies co is expected to generate 1.05 times more return on investment than RFTech. However, PNC Technologies is 1.05 times more volatile than RFTech Co. It trades about 0.04 of its potential returns per unit of risk. RFTech Co is currently generating about -0.09 per unit of risk. If you would invest  383,675  in PNC Technologies co on December 4, 2024 and sell it today you would earn a total of  13,325  from holding PNC Technologies co or generate 3.47% return on investment over 90 days.

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

PNC Technologies co  vs.  RFTech Co

PNC Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PNC Technologies co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

RFTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days RFTech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PNC Technologies and RFTech

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

The idea behind PNC Technologies co and RFTech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.