Correlation Between PNC Financial and Newmont

Can any of the company-specific risk be diversified away by investing in both PNC Financial and Newmont 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 Newmont 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 Newmont, you can compare the effects of market volatilities on PNC Financial and Newmont 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 Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Newmont.

Diversification Opportunities for PNC Financial and Newmont

-0.77

Correlation Coefficient

PNC Financial  Newmont

Pay attention - limited upside

The 3 months correlation between PNC and Newmont is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The PNC Financial and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of PNC Financial i.e., PNC Financial and Newmont go up and down completely randomly.

Pair Corralation between PNC Financial and Newmont

Assuming the 90 days horizon The PNC Financial is expected to under-perform the Newmont. But the stock apears to be less risky and, when comparing its historical volatility, The PNC Financial is 2.17 times less risky than Newmont. The stock trades about -0.51 of its potential returns per unit of risk. The Newmont is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest  3,917  in Newmont on October 1, 2024 and sell it today you would lose (265.00) from holding Newmont or give up 6.77% of portfolio value over 90 days.

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

The PNC Financial  vs.  Newmont

PNC Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The PNC Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PNC Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Newmont

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PNC Financial and Newmont

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

The idea behind The PNC Financial and Newmont 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.