Correlation Between PNC Financial and IBEX Technologies
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.48% |
Values | Daily Returns |
The PNC Financial vs. IBEX Technologies
Performance |
Timeline |
PNC Financial |
IBEX Technologies |
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.PNC Financial vs. US Bancorp | PNC Financial vs. Fifth Third Bancorp | PNC Financial vs. MT Bank Corp | PNC Financial vs. Huntington Bancshares Incorporated |
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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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