Correlation Between PNC Financial and AMADEUS IT

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

Diversification Opportunities for PNC Financial and AMADEUS IT

-0.15

Correlation Coefficient

PNC Financial  AMADEUS IT

Good diversification

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

Pair Corralation between PNC Financial and AMADEUS IT

Assuming the 90 days trading horizon PNC Financial Services is expected to under-perform the AMADEUS IT. In addition to that, PNC Financial is 1.16 times more volatile than AMADEUS IT HOLD. It trades about -0.13 of its total potential returns per unit of risk. AMADEUS IT HOLD is currently generating about 0.12 per unit of volatility. If you would invest  6,698  in AMADEUS IT HOLD on December 21, 2024 and sell it today you would earn a total of  700.00  from holding AMADEUS IT HOLD or generate 10.45% return on investment over 90 days.

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

PNC Financial Services  vs.  AMADEUS IT HOLD

PNC Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days PNC Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AMADEUS IT HOLD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMADEUS IT HOLD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AMADEUS IT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PNC Financial and AMADEUS IT

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

The idea behind PNC Financial Services and AMADEUS IT HOLD 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.