Correlation Between PNC Financial and IBEX Technologies

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Can any of the company-specific risk be diversified away by investing in both PNC Financial and IBEX Technologies 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 IBEX Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The PNC Financial and IBEX Technologies, you can compare the effects of market volatilities on PNC Financial and IBEX Technologies 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 IBEX Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and IBEX Technologies.

Diversification Opportunities for PNC Financial and IBEX Technologies

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between PNC and IBEX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The PNC Financial and IBEX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Technologies 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 The PNC Financial are associated (or correlated) with IBEX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Technologies has no effect on the direction of PNC Financial i.e., PNC Financial and IBEX Technologies go up and down completely randomly.

Pair Corralation between PNC Financial and IBEX Technologies

Assuming the 90 days horizon The PNC Financial is expected to generate 1.27 times more return on investment than IBEX Technologies. However, PNC Financial is 1.27 times more volatile than IBEX Technologies. It trades about 0.11 of its potential returns per unit of risk. IBEX Technologies is currently generating about 0.01 per unit of risk. If you would invest  16,448  in The PNC Financial on September 22, 2024 and sell it today you would earn a total of  2,052  from holding The PNC Financial or generate 12.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.48%
ValuesDaily Returns

The PNC Financial  vs.  IBEX Technologies

 Performance 
       Timeline  
PNC Financial 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The PNC Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PNC Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.
IBEX Technologies 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PNC Financial and IBEX Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PNC Financial and IBEX Technologies

The main advantage of trading using opposite PNC Financial and IBEX Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, IBEX Technologies 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 IBEX Technologies will offset losses from the drop in IBEX Technologies' long position.
The idea behind The PNC Financial and IBEX Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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