Correlation Between Pnc International and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Pnc International and Investec Emerging 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 International and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pnc International Growth and Investec Emerging Markets, you can compare the effects of market volatilities on Pnc International and Investec Emerging 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 International with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc International and Investec Emerging.
Diversification Opportunities for Pnc International and Investec Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pnc and Investec is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pnc International Growth and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Pnc International 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 International Growth are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Pnc International i.e., Pnc International and Investec Emerging go up and down completely randomly.
Pair Corralation between Pnc International and Investec Emerging
Assuming the 90 days horizon Pnc International is expected to generate 1.35 times less return on investment than Investec Emerging. But when comparing it to its historical volatility, Pnc International Growth is 1.14 times less risky than Investec Emerging. It trades about 0.32 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,073 in Investec Emerging Markets on April 22, 2025 and sell it today you would earn a total of 191.00 from holding Investec Emerging Markets or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pnc International Growth vs. Investec Emerging Markets
Performance |
| Timeline |
| Pnc International Growth |
| Investec Emerging Markets |
Pnc International and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pnc International and Investec Emerging
The main advantage of trading using opposite Pnc International and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pnc International position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Pnc International vs. Manning Napier Overseas | Pnc International vs. Focused International Growth | Pnc International vs. Fidelity Advisor Overseas | Pnc International vs. Ab Centrated International |
| Investec Emerging vs. Tax Managed International Equity | Investec Emerging vs. Smallcap World Fund | Investec Emerging vs. The Growth Equity | Investec Emerging vs. Franklin Equity Income |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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