Correlation Between Pnc Emerging and Smallcap Growth

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

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

Diversification Opportunities for Pnc Emerging and Smallcap Growth

0.71

Correlation Coefficient

Pnc Emerging  Smallcap Growth

Poor diversification

The 3 months correlation between Pnc and Smallcap is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pnc Emerging Markets and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth and Pnc 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 Pnc Emerging Markets are associated (or correlated) with Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Pnc Emerging i.e., Pnc Emerging and Smallcap Growth go up and down completely randomly.

Pair Corralation between Pnc Emerging and Smallcap Growth

Assuming the 90 days horizon Pnc Emerging Markets is expected to under-perform the Smallcap Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pnc Emerging Markets is 2.05 times less risky than Smallcap Growth. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Smallcap Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,632  in Smallcap Growth Fund on September 5, 2025 and sell it today you would earn a total of  54.00  from holding Smallcap Growth Fund or generate 3.31% return on investment over 90 days.

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

Pnc Emerging Markets  vs.  Smallcap Growth Fund

Pnc Emerging Markets

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pnc Emerging may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Smallcap Growth

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Growth Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Smallcap Growth may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Pnc Emerging and Smallcap Growth

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

The idea behind Pnc Emerging Markets and Smallcap Growth Fund 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.