Correlation Between Federated Mdt and Pnc International

Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Pnc International 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 Federated Mdt and Pnc International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Mdt Balanced and Pnc International Equity, you can compare the effects of market volatilities on Federated Mdt and Pnc International 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 Federated Mdt with a short position of Pnc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Pnc International.

Diversification Opportunities for Federated Mdt and Pnc International

0.75

Correlation Coefficient

Federated Mdt  Pnc International

Poor diversification

The 3 months correlation between Federated and Pnc is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Balanced and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity and Federated Mdt 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 Federated Mdt Balanced are associated (or correlated) with Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Federated Mdt i.e., Federated Mdt and Pnc International go up and down completely randomly.

Pair Corralation between Federated Mdt and Pnc International

Assuming the 90 days horizon Federated Mdt Balanced is expected to generate 0.68 times more return on investment than Pnc International. However, Federated Mdt Balanced is 1.47 times less risky than Pnc International. It trades about 0.05 of its potential returns per unit of risk. Pnc International Equity is currently generating about 0.0 per unit of risk. If you would invest  1,817  in Federated Mdt Balanced on October 13, 2024 and sell it today you would earn a total of  318.00  from holding Federated Mdt Balanced or generate 17.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Federated Mdt Balanced  vs.  Pnc International Equity

Federated Mdt Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Mdt Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pnc International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pnc International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Federated Mdt and Pnc International

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

The idea behind Federated Mdt Balanced and Pnc International Equity 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.