Correlation Between Federated Strategic and Pnc International

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

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

Diversification Opportunities for Federated Strategic and Pnc International

0.75

Correlation Coefficient

Federated Strategic  Pnc International

Poor diversification

The 3 months correlation between Federated and Pnc is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Value and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity and Federated Strategic 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 Federated Strategic Value are associated (or correlated) with Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Federated Strategic i.e., Federated Strategic and Pnc International go up and down completely randomly.

Pair Corralation between Federated Strategic and Pnc International

Assuming the 90 days horizon Federated Strategic is expected to generate 1.74 times less return on investment than Pnc International. In addition to that, Federated Strategic is 1.07 times more volatile than Pnc International Equity. It trades about 0.19 of its total potential returns per unit of risk. Pnc International Equity is currently generating about 0.36 per unit of volatility. If you would invest  2,175  in Pnc International Equity on April 16, 2025 and sell it today you would earn a total of  325.00  from holding Pnc International Equity or generate 14.94% return on investment over 90 days.

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

Federated Strategic Value  vs.  Pnc International Equity

Federated Strategic Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Strategic Value are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Federated Strategic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pnc International Equity

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pnc International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federated Strategic and Pnc International

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

The idea behind Federated Strategic Value and Pnc International Equity 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 CEOs Directory module to screen CEOs from public companies around the world.