Correlation Between Generations Bancorp and PNC Financial

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

By analyzing existing cross correlation between Generations Bancorp NY and PNC Financial Services, you can compare the effects of market volatilities on Generations Bancorp 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 Generations Bancorp with a short position of PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generations Bancorp and PNC Financial.

Diversification Opportunities for Generations Bancorp and PNC Financial

0.27

Correlation Coefficient

Generations Bancorp  PNC Financial

Modest diversification

The 3 months correlation between Generations and PNC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Generations Bancorp NY and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services and Generations Bancorp 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 Generations Bancorp NY 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 Services has no effect on the direction of Generations Bancorp i.e., Generations Bancorp and PNC Financial go up and down completely randomly.

Pair Corralation between Generations Bancorp and PNC Financial

If you would invest  1,544  in Generations Bancorp NY on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Generations Bancorp NY or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Generations Bancorp NY  vs.  PNC Financial Services

Generations Bancorp

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Generations Bancorp NY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Generations Bancorp showed solid returns over the last few months and may actually be approaching a breakup point.

PNC Financial Services

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PNC Financial Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PNC Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Generations Bancorp and PNC Financial

The main advantage of trading using opposite Generations Bancorp and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generations Bancorp 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.

The idea behind Generations Bancorp NY and PNC Financial Services 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.