Correlation Between Gmo Alternative and Pnc International

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

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

Diversification Opportunities for Gmo Alternative and Pnc International

0.73

Correlation Coefficient

Gmo Alternative  Pnc International

Poor diversification

The 3 months correlation between Gmo and PNC is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Alternative Allocation 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 Gmo Alternative 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 Gmo Alternative Allocation 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 Gmo Alternative i.e., Gmo Alternative and Pnc International go up and down completely randomly.

Pair Corralation between Gmo Alternative and Pnc International

Assuming the 90 days horizon Gmo Alternative is expected to generate 2.2 times less return on investment than Pnc International. But when comparing it to its historical volatility, Gmo Alternative Allocation is 1.89 times less risky than Pnc International. It trades about 0.13 of its potential returns per unit of risk. Pnc International Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,498  in Pnc International Equity on July 6, 2025 and sell it today you would earn a total of  167.00  from holding Pnc International Equity or generate 6.69% return on investment over 90 days.

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

Gmo Alternative Allocation  vs.  Pnc International Equity

Gmo Alternative Allo

Risk-Adjusted Performance

Fair

Over the last 90 days Gmo Alternative Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Gmo Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pnc International Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 12 (%) 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 November 2025.

Pair Trading with Gmo Alternative and Pnc International

The main advantage of trading using opposite Gmo Alternative and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Alternative 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 Gmo Alternative Allocation 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.