Correlation Between Shelton Emerging and Pnc International

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

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

Diversification Opportunities for Shelton Emerging and Pnc International

0.6

Correlation Coefficient

Shelton Emerging  Pnc International

Poor diversification

The 3 months correlation between Shelton and Pnc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets 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 Shelton Emerging 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 Shelton Emerging Markets 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 Shelton Emerging i.e., Shelton Emerging and Pnc International go up and down completely randomly.

Pair Corralation between Shelton Emerging and Pnc International

Assuming the 90 days horizon Shelton Emerging Markets is expected to generate 1.45 times more return on investment than Pnc International. However, Shelton Emerging is 1.45 times more volatile than Pnc International Equity. It trades about 0.3 of its potential returns per unit of risk. Pnc International Equity is currently generating about 0.28 per unit of risk. If you would invest  1,695  in Shelton Emerging Markets on April 25, 2025 and sell it today you would earn a total of  277.00  from holding Shelton Emerging Markets or generate 16.34% return on investment over 90 days.

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

Shelton Emerging Markets  vs.  Pnc International Equity

Shelton Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton Emerging Markets are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Shelton Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Pnc International Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pnc International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Shelton Emerging and Pnc International

The main advantage of trading using opposite Shelton Emerging and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging 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 Shelton Emerging Markets 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.