Correlation Between PNC Technologies and Konan Technology

Can any of the company-specific risk be diversified away by investing in both PNC Technologies and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on PNC Technologies and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Technologies and Konan Technology.

Diversification Opportunities for PNC Technologies and Konan Technology

-0.67

Correlation Coefficient

PNC Technologies  Konan Technology

Excellent diversification

The 3 months correlation between PNC and Konan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PNC Technologies co and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of PNC Technologies i.e., PNC Technologies and Konan Technology go up and down completely randomly.

Pair Corralation between PNC Technologies and Konan Technology

Assuming the 90 days trading horizon PNC Technologies co is expected to generate 0.63 times more return on investment than Konan Technology. However, PNC Technologies co is 1.58 times less risky than Konan Technology. It trades about -0.04 of its potential returns per unit of risk. Konan Technology is currently generating about -0.03 per unit of risk. If you would invest  555,768  in PNC Technologies co on October 9, 2024 and sell it today you would lose (141,768) from holding PNC Technologies co or give up 25.51% of portfolio value over 90 days.

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

PNC Technologies co  vs.  Konan Technology

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Konan Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Konan Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Konan Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PNC Technologies and Konan Technology

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

The idea behind PNC Technologies co and Konan Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.