Correlation Between Federated Gov and Pnc International

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

By analyzing existing cross correlation between Federated Gov Sec and Pnc International Equity, you can compare the effects of market volatilities on Federated Gov and Pnc International 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 Federated Gov with a short position of Pnc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Gov and Pnc International.

Diversification Opportunities for Federated Gov and Pnc International

0.59

Correlation Coefficient

Federated Gov  Pnc International

Very weak diversification

The 3 months correlation between Federated and Pnc is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Federated Gov Sec and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity and Federated Gov 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 Federated Gov Sec are associated (or correlated) with Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Federated Gov i.e., Federated Gov and Pnc International go up and down completely randomly.

Pair Corralation between Federated Gov and Pnc International

Assuming the 90 days horizon Federated Gov Sec is expected to generate 0.03 times more return on investment than Pnc International. However, Federated Gov Sec is 36.68 times less risky than Pnc International. It trades about -0.2 of its potential returns per unit of risk. Pnc International Equity is currently generating about -0.28 per unit of risk. If you would invest  961.00  in Federated Gov Sec on September 25, 2024 and sell it today you would lose (3.00) from holding Federated Gov Sec or give up 0.31% of portfolio value over 90 days.

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

Federated Gov Sec  vs.  Pnc International Equity

Federated Gov Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Gov Sec has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Federated Gov is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pnc International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pnc International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Federated Gov and Pnc International

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

The idea behind Federated Gov Sec and Pnc International Equity 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..