Correlation Between Pnc International and Federated Mid-cap
Can any of the company-specific risk be diversified away by investing in both Pnc International and Federated Mid-cap 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 Federated Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pnc International Equity and Federated Mid Cap Index, you can compare the effects of market volatilities on Pnc International and Federated Mid-cap 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 Federated Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc International and Federated Mid-cap.
Diversification Opportunities for Pnc International and Federated Mid-cap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pnc and Federated is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pnc International Equity and Federated Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mid Cap 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 Equity are associated (or correlated) with Federated Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mid Cap has no effect on the direction of Pnc International i.e., Pnc International and Federated Mid-cap go up and down completely randomly.
Pair Corralation between Pnc International and Federated Mid-cap
Assuming the 90 days horizon Pnc International is expected to generate 1.21 times less return on investment than Federated Mid-cap. But when comparing it to its historical volatility, Pnc International Equity is 1.42 times less risky than Federated Mid-cap. It trades about 0.22 of its potential returns per unit of risk. Federated Mid Cap Index is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,554 in Federated Mid Cap Index on June 4, 2025 and sell it today you would earn a total of 57.00 from holding Federated Mid Cap Index or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pnc International Equity vs. Federated Mid Cap Index
Performance |
| Timeline |
| Pnc International Equity |
| Federated Mid Cap |
Pnc International and Federated Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pnc International and Federated Mid-cap
The main advantage of trading using opposite Pnc International and Federated Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pnc International position performs unexpectedly, Federated Mid-cap 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 Federated Mid-cap will offset losses from the drop in Federated Mid-cap's long position.| Pnc International vs. Virtus Convertible | Pnc International vs. Rationalpier 88 Convertible | Pnc International vs. Allianzgi Convertible Income | Pnc International vs. Putnam Convertible Securities |
| Federated Mid-cap vs. Federated Mdt Large | Federated Mid-cap vs. Federated Global Allocation | Federated Mid-cap vs. Federated Max Cap Index | Federated Mid-cap vs. Federated Total Return |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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