Correlation Between Federated Prudent and Pnc International

Can any of the company-specific risk be diversified away by investing in both Federated Prudent 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 Prudent 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 Prudent Bear and Pnc International Equity, you can compare the effects of market volatilities on Federated Prudent 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 Prudent with a short position of Pnc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Prudent and Pnc International.

Diversification Opportunities for Federated Prudent and Pnc International

-0.97

Correlation Coefficient

Federated Prudent  Pnc International

Pay attention - limited upside

The 3 months correlation between Federated and Pnc is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear 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 Prudent 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 Prudent Bear 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 Prudent i.e., Federated Prudent and Pnc International go up and down completely randomly.

Pair Corralation between Federated Prudent and Pnc International

Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the Pnc International. In addition to that, Federated Prudent is 1.01 times more volatile than Pnc International Equity. It trades about -0.37 of its total potential returns per unit of risk. Pnc International Equity is currently generating about 0.15 per unit of volatility. If you would invest  2,470  in Pnc International Equity on April 6, 2025 and sell it today you would earn a total of  49.00  from holding Pnc International Equity or generate 1.98% return on investment over 90 days.

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

Federated Prudent Bear  vs.  Pnc International Equity

Federated Prudent Bear

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federated Prudent Bear 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 basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pnc International Equity

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pnc International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federated Prudent and Pnc International

The main advantage of trading using opposite Federated Prudent and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Prudent 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 Prudent Bear 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.