Correlation Between Pnc International and Transamerica Asset

Can any of the company-specific risk be diversified away by investing in both Pnc International and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation , you can compare the effects of market volatilities on Pnc International and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc International and Transamerica Asset.

Diversification Opportunities for Pnc International and Transamerica Asset

0.89

Correlation Coefficient

Pnc International  Transamerica Asset

Very poor diversification

The 3 months correlation between Pnc and Transamerica is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pnc International Equity and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Pnc International i.e., Pnc International and Transamerica Asset go up and down completely randomly.

Pair Corralation between Pnc International and Transamerica Asset

Assuming the 90 days horizon Pnc International is expected to generate 1.43 times less return on investment than Transamerica Asset. In addition to that, Pnc International is 1.08 times more volatile than Transamerica Asset Allocation . It trades about 0.13 of its total potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.2 per unit of volatility. If you would invest  1,562  in Transamerica Asset Allocation on May 19, 2025 and sell it today you would earn a total of  133.00  from holding Transamerica Asset Allocation or generate 8.51% return on investment over 90 days.

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

Pnc International Equity  vs.  Transamerica Asset Allocation

Pnc International Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pnc International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Asset Allocation are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Transamerica Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Pnc International and Transamerica Asset

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

The idea behind Pnc International Equity and Transamerica Asset Allocation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.