Correlation Between Dupont Denemours and PNC Bank

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Can any of the company-specific risk be diversified away by investing in both Dupont Denemours and PNC Bank 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 Dupont Denemours and PNC Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont Denemours and PNC Bank, you can compare the effects of market volatilities on Dupont Denemours and PNC Bank 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 Dupont Denemours with a short position of PNC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont Denemours and PNC Bank.

Diversification Opportunities for Dupont Denemours and PNC Bank

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Dupont and PNC Bank is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dupont Denemours and PNC Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Bank and Dupont Denemours 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 Dupont Denemours are associated (or correlated) with PNC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Bank has no effect on the direction of Dupont Denemours i.e., Dupont Denemours and PNC Bank go up and down completely randomly.

Pair Corralation between Dupont Denemours and PNC Bank

Allowing for the 90-day total investment horizon Dupont Denemours is expected to under-perform the PNC Bank. In addition to that, Dupont Denemours is 1.27 times more volatile than PNC Bank. It trades about -0.25 of its total potential returns per unit of risk. PNC Bank is currently generating about -0.14 per unit of volatility. If you would invest  17,295  in PNC Bank on March 27, 2022 and sell it today you would lose (1,011)  from holding PNC Bank or give up 5.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Dupont Denemours  vs.  PNC Bank

 Performance (%) 
      Timeline 
Dupont Denemours 
Dupont Performance
0 of 100
Over the last 90 days Dupont Denemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in July 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0238
Payout Ratio
0.35
Last Split Factor
4725:10000
Forward Annual Dividend Rate
1.32
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-27
Last Split Date
2019-06-03

Dupont Price Channel

PNC Bank 
PNC Bank Performance
0 of 100
Over the last 90 days PNC Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0383
Payout Ratio
0.43
Last Split Factor
2:1
Forward Annual Dividend Rate
6.0
Dividend Date
2022-05-05
Ex Dividend Date
2022-04-12
Last Split Date
1992-11-16

PNC Bank Price Channel

Dupont Denemours and PNC Bank Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Dupont Denemours and PNC Bank

The main advantage of trading using opposite Dupont Denemours and PNC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont Denemours position performs unexpectedly, PNC Bank 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 Bank will offset losses from the drop in PNC Bank's long position.
The idea behind Dupont Denemours and PNC Bank 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.
Check out your portfolio center. 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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