Correlation Between Pnc Emerging and Gold

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

By analyzing existing cross correlation between Pnc Emerging Markets and Gold And Precious, you can compare the effects of market volatilities on Pnc Emerging and Gold 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 Emerging with a short position of Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc Emerging and Gold.

Diversification Opportunities for Pnc Emerging and Gold

0.67

Correlation Coefficient

Pnc Emerging  Gold

Poor diversification

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

Pair Corralation between Pnc Emerging and Gold

Assuming the 90 days horizon Pnc Emerging Markets is expected to generate 0.44 times more return on investment than Gold. However, Pnc Emerging Markets is 2.29 times less risky than Gold. It trades about -0.16 of its potential returns per unit of risk. Gold And Precious is currently generating about -0.26 per unit of risk. If you would invest  1,634  in Pnc Emerging Markets on September 26, 2024 and sell it today you would lose (87.00) from holding Pnc Emerging Markets or give up 5.32% of portfolio value over 90 days.

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

Pnc Emerging Markets  vs.  Gold And Precious

Pnc Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gold And Precious

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold And Precious 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 basic 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 Pnc Emerging and Gold

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

The idea behind Pnc Emerging Markets and Gold And Precious 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.