Correlation Between Sberbank and PNC Financial

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

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

Diversification Opportunities for Sberbank and PNC Financial

0.0

Correlation Coefficient

Sberbank  PNC Financial

Pay attention - limited upside

The 3 months correlation between Sberbank and PNC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sberbank Of Russia and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services and Sberbank 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 Sberbank Of Russia are associated (or correlated) with PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Sberbank i.e., Sberbank and PNC Financial go up and down completely randomly.

Pair Corralation between Sberbank and PNC Financial

If you would invest (100.00) in Sberbank Of Russia on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Sberbank Of Russia or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sberbank Of Russia  vs.  PNC Financial Services

Sberbank Of Russia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sberbank Of Russia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Sberbank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PNC Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PNC Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PNC Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sberbank and PNC Financial

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

The idea behind Sberbank Of Russia and PNC Financial Services 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.