Correlation Between PNC Financial and American Express

Can any of the company-specific risk be diversified away by investing in both PNC Financial and American Express 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 Financial and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PNC Financial Services and American Express, you can compare the effects of market volatilities on PNC Financial and American Express 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 Financial with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and American Express.

Diversification Opportunities for PNC Financial and American Express

0.72

Correlation Coefficient

PNC Financial  American Express

Poor diversification

The 3 months correlation between PNC and American is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and PNC Financial 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 Financial Services are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of PNC Financial i.e., PNC Financial and American Express go up and down completely randomly.

Pair Corralation between PNC Financial and American Express

Considering the 90-day investment horizon PNC Financial Services is expected to generate 0.85 times more return on investment than American Express. However, PNC Financial Services is 1.17 times less risky than American Express. It trades about 0.17 of its potential returns per unit of risk. American Express is currently generating about 0.08 per unit of risk. If you would invest  16,212  in PNC Financial Services on May 6, 2025 and sell it today you would earn a total of  2,376  from holding PNC Financial Services or generate 14.66% return on investment over 90 days.

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

PNC Financial Services  vs.  American Express

PNC Financial Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PNC Financial Services are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, PNC Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

American Express

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with PNC Financial and American Express

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

The idea behind PNC Financial Services and American Express 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 Valuation module to check real value of public entities based on technical and fundamental data.