Correlation Between First Financial and Pioneer Bankcorp
Can any of the company-specific risk be diversified away by investing in both First Financial and Pioneer Bankcorp 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 First Financial and Pioneer Bankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Financial Northwest and Pioneer Bankcorp, you can compare the effects of market volatilities on First Financial and Pioneer Bankcorp 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 First Financial with a short position of Pioneer Bankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and Pioneer Bankcorp.
Diversification Opportunities for First Financial and Pioneer Bankcorp
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Pioneer is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest and Pioneer Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bankcorp and First Financial 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 First Financial Northwest are associated (or correlated) with Pioneer Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bankcorp has no effect on the direction of First Financial i.e., First Financial and Pioneer Bankcorp go up and down completely randomly.
Pair Corralation between First Financial and Pioneer Bankcorp
Given the investment horizon of 90 days First Financial is expected to generate 16.08 times less return on investment than Pioneer Bankcorp. In addition to that, First Financial is 1.58 times more volatile than Pioneer Bankcorp. It trades about 0.01 of its total potential returns per unit of risk. Pioneer Bankcorp is currently generating about 0.31 per unit of volatility. If you would invest 4,485 in Pioneer Bankcorp on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Pioneer Bankcorp or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Financial Northwest vs. Pioneer Bankcorp
Performance |
| Timeline |
| First Financial Northwest |
| Pioneer Bankcorp |
First Financial and Pioneer Bankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Financial and Pioneer Bankcorp
The main advantage of trading using opposite First Financial and Pioneer Bankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial position performs unexpectedly, Pioneer Bankcorp 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 Pioneer Bankcorp will offset losses from the drop in Pioneer Bankcorp's long position.| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial vs. Community West Bancshares |
| Pioneer Bankcorp vs. FineMark Holdings | Pioneer Bankcorp vs. Oxford Bank | Pioneer Bankcorp vs. Prime Meridian Holding | Pioneer Bankcorp vs. Oconee Financial |
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 the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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