Correlation Between Westcore International and Pnc Emerging

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

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

Diversification Opportunities for Westcore International and Pnc Emerging

0.2

Correlation Coefficient

Westcore International  Pnc Emerging

Modest diversification

The 3 months correlation between Westcore and Pnc is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Westcore International Small C and Pnc Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc Emerging Markets and Westcore 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 Westcore International Small Cap are associated (or correlated) with Pnc Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc Emerging Markets has no effect on the direction of Westcore International i.e., Westcore International and Pnc Emerging go up and down completely randomly.

Pair Corralation between Westcore International and Pnc Emerging

If you would invest  1,539  in Pnc Emerging Markets on September 13, 2024 and sell it today you would earn a total of  59.00  from holding Pnc Emerging Markets or generate 3.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Westcore International Small C  vs.  Pnc Emerging Markets

Westcore International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westcore International Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Westcore International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pnc Emerging Markets

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc Emerging Markets are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Pnc Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Westcore International and Pnc Emerging

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

The idea behind Westcore International Small Cap and Pnc Emerging Markets 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.