Correlation Between Pender Real and Pnc International

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

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

Diversification Opportunities for Pender Real and Pnc International

-0.87

Correlation Coefficient

Pender Real  Pnc International

Pay attention - limited upside

The 3 months correlation between Pender and Pnc is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate 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 Pender Real 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 Pender Real Estate 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 Pender Real i.e., Pender Real and Pnc International go up and down completely randomly.

Pair Corralation between Pender Real and Pnc International

Assuming the 90 days horizon Pender Real is expected to generate 1.21 times less return on investment than Pnc International. But when comparing it to its historical volatility, Pender Real Estate is 13.47 times less risky than Pnc International. It trades about 0.52 of its potential returns per unit of risk. Pnc International Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,075  in Pnc International Equity on September 23, 2024 and sell it today you would earn a total of  389.00  from holding Pnc International Equity or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	84.1%
Values	Daily Returns

Pender Real Estate  vs.  Pnc International Equity

Pender Real Estate

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real 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 fairly strong forward indicators, Pnc International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pender Real and Pnc International

The main advantage of trading using opposite Pender Real and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pender Real 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 Pender Real Estate 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.