Correlation Between Pnc International and Gateway Equity

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

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

Diversification Opportunities for Pnc International and Gateway Equity

0.78

Correlation Coefficient

Pnc International  Gateway Equity

Poor diversification

The 3 months correlation between Pnc and Gateway is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pnc International Growth and Gateway Equity Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Equity Call and Pnc International 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 International Growth are associated (or correlated) with Gateway Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Equity Call has no effect on the direction of Pnc International i.e., Pnc International and Gateway Equity go up and down completely randomly.

Pair Corralation between Pnc International and Gateway Equity

Assuming the 90 days horizon Pnc International is expected to generate 1.14 times less return on investment than Gateway Equity. In addition to that, Pnc International is 1.97 times more volatile than Gateway Equity Call. It trades about 0.14 of its total potential returns per unit of risk. Gateway Equity Call is currently generating about 0.31 per unit of volatility. If you would invest  1,956  in Gateway Equity Call on June 15, 2025 and sell it today you would earn a total of  138.00  from holding Gateway Equity Call or generate 7.06% return on investment over 90 days.

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

Pnc International Growth  vs.  Gateway Equity Call

Pnc International Growth

Risk-Adjusted Performance

Good

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

Gateway Equity Call

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Equity Call are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gateway Equity may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Pnc International and Gateway Equity

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

The idea behind Pnc International Growth and Gateway Equity Call 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.