Correlation Between Pnc Balanced and State Street

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

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

Diversification Opportunities for Pnc Balanced and State Street

0.76

Correlation Coefficient

Pnc Balanced  State Street

Poor diversification

The 3 months correlation between Pnc and State is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pnc Balanced Allocation and State Street Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Aggregate and Pnc Balanced 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 Balanced Allocation are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Aggregate has no effect on the direction of Pnc Balanced i.e., Pnc Balanced and State Street go up and down completely randomly.

Pair Corralation between Pnc Balanced and State Street

Assuming the 90 days horizon Pnc Balanced Allocation is expected to generate 2.02 times more return on investment than State Street. However, Pnc Balanced is 2.02 times more volatile than State Street Aggregate. It trades about 0.21 of its potential returns per unit of risk. State Street Aggregate is currently generating about 0.15 per unit of risk. If you would invest  1,335  in Pnc Balanced Allocation on May 14, 2025 and sell it today you would earn a total of  96.00  from holding Pnc Balanced Allocation or generate 7.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Pnc Balanced Allocation  vs.  State Street Aggregate

Pnc Balanced Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc Balanced Allocation are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pnc Balanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

State Street Aggregate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Aggregate are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pnc Balanced and State Street

The main advantage of trading using opposite Pnc Balanced and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pnc Balanced position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.

The idea behind Pnc Balanced Allocation and State Street Aggregate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.