Correlation Between Pnc International and Federated Floating

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

By analyzing existing cross correlation between Pnc International Equity and Federated Floating Rate, you can compare the effects of market volatilities on Pnc International and Federated Floating 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 Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc International and Federated Floating.

Diversification Opportunities for Pnc International and Federated Floating

0.96

Correlation Coefficient

Pnc International  Federated Floating

Almost no diversification

The 3 months correlation between Pnc and Federated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Pnc International Equity and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate 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 Equity are associated (or correlated) with Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Pnc International i.e., Pnc International and Federated Floating go up and down completely randomly.

Pair Corralation between Pnc International and Federated Floating

Assuming the 90 days horizon Pnc International Equity is expected to generate 4.86 times more return on investment than Federated Floating. However, Pnc International is 4.86 times more volatile than Federated Floating Rate. It trades about 0.28 of its potential returns per unit of risk. Federated Floating Rate is currently generating about 0.3 per unit of risk. If you would invest  2,274  in Pnc International Equity on April 24, 2025 and sell it today you would earn a total of  233.00  from holding Pnc International Equity or generate 10.25% return on investment over 90 days.

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

Pnc International Equity  vs.  Federated Floating Rate

Pnc International Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 21 (%) 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 August 2025.

Federated Floating Rate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Floating Rate are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Floating 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 International and Federated Floating

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

The idea behind Pnc International Equity and Federated Floating Rate 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.