Correlation Between PNC Bank and Nasdaq

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

Diversification Opportunities for PNC Bank and Nasdaq

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between PNC Bank and Nasdaq is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PNC Bank and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and PNC Bank 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 Bank are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of PNC Bank i.e., PNC Bank and Nasdaq go up and down completely randomly.

Pair Corralation between PNC Bank and Nasdaq

Considering the 90-day investment horizon PNC Bank is expected to under-perform the Nasdaq. In addition to that, PNC Bank is 1.18 times more volatile than Nasdaq Inc. It trades about -0.02 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about -0.01 per unit of volatility. If you would invest  16,626  in Nasdaq Inc on April 6, 2022 and sell it today you would lose (877.00)  from holding Nasdaq Inc or give up 5.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

PNC Bank  vs.  Nasdaq Inc

 Performance (%) 
      Timeline 
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 latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0372
Payout Ratio
0.43
Last Split Factor
2:1
Forward Annual Dividend Rate
6.0
Dividend Date
2022-08-05
Ex Dividend Date
2022-07-12
Last Split Date
1992-11-16

PNC Bank Price Channel

Nasdaq Inc 
Nasdaq Performance
0 of 100
Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0154
Payout Ratio
0.29
Forward Annual Dividend Rate
2.4
Dividend Date
2022-06-24
Ex Dividend Date
2022-06-09

Nasdaq Price Channel

PNC Bank and Nasdaq Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with PNC Bank and Nasdaq

The main advantage of trading using opposite PNC Bank and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Bank position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq's long position.
The idea behind PNC Bank and Nasdaq Inc 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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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