Correlation Between Gmo E and Pnc International

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

Diversification Opportunities for Gmo E and Pnc International

0.59

Correlation Coefficient

Gmo E  Pnc International

Very weak diversification

The 3 months correlation between Gmo and Pnc is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus 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 E 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 E Plus 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 E i.e., Gmo E and Pnc International go up and down completely randomly.

Pair Corralation between Gmo E and Pnc International

Assuming the 90 days horizon Gmo E is expected to generate 4.16 times less return on investment than Pnc International. But when comparing it to its historical volatility, Gmo E Plus is 2.35 times less risky than Pnc International. It trades about 0.1 of its potential returns per unit of risk. Pnc International Equity is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,346  in Pnc International Equity on May 3, 2025 and sell it today you would earn a total of  169.00  from holding Pnc International Equity or generate 7.2% return on investment over 90 days.

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

Gmo E Plus  vs.  Pnc International Equity

Gmo E Plus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo E Plus are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gmo E 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 13 (%) 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 September 2025.

Pair Trading with Gmo E and Pnc International

The main advantage of trading using opposite Gmo E and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo E 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 E Plus 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.