Correlation Between PNC Financial and Ottawa Savings

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

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

Diversification Opportunities for PNC Financial and Ottawa Savings

-0.15

Correlation Coefficient

PNC Financial  Ottawa Savings

Good diversification

The 3 months correlation between PNC and Ottawa is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Ottawa Savings Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ottawa Savings Bancorp and PNC Financial 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 Financial Services are associated (or correlated) with Ottawa Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ottawa Savings Bancorp has no effect on the direction of PNC Financial i.e., PNC Financial and Ottawa Savings go up and down completely randomly.

Pair Corralation between PNC Financial and Ottawa Savings

If you would invest  1,285  in Ottawa Savings Bancorp on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Ottawa Savings Bancorp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

PNC Financial Services  vs.  Ottawa Savings Bancorp

PNC Financial Services

Risk-Adjusted Performance

3 of 100

Insignificant

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.

Ottawa Savings Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ottawa Savings Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ottawa Savings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PNC Financial and Ottawa Savings

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

The idea behind PNC Financial Services and Ottawa Savings Bancorp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.