Correlation Between PNC Financial and TRIP GROUP

Can any of the company-specific risk be diversified away by investing in both PNC Financial and TRIP GROUP 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 TRIP GROUP 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 TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on PNC Financial and TRIP GROUP 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 TRIP GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and TRIP GROUP.

Diversification Opportunities for PNC Financial and TRIP GROUP

0.4

Correlation Coefficient

PNC Financial  TRIP GROUP

Very weak diversification

The 3 months correlation between PNC and TRIP is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and TRIPCOM GROUP DL 00125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIPCOM GROUP DL 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 TRIP GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIPCOM GROUP DL has no effect on the direction of PNC Financial i.e., PNC Financial and TRIP GROUP go up and down completely randomly.

Pair Corralation between PNC Financial and TRIP GROUP

Assuming the 90 days trading horizon PNC Financial Services is expected to under-perform the TRIP GROUP. But the stock apears to be less risky and, when comparing its historical volatility, PNC Financial Services is 2.1 times less risky than TRIP GROUP. The stock trades about -0.13 of its potential returns per unit of risk. The TRIPCOM GROUP DL 00125 is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  6,766  in TRIPCOM GROUP DL 00125 on December 21, 2024 and sell it today you would lose (898.00) from holding TRIPCOM GROUP DL 00125 or give up 13.27% of portfolio value over 90 days.

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

PNC Financial Services  vs.  TRIPCOM GROUP DL 00125

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 fragile 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.

TRIPCOM GROUP DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRIPCOM GROUP DL 00125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PNC Financial and TRIP GROUP

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

The idea behind PNC Financial Services and TRIPCOM GROUP DL 00125 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .