Correlation Between Mountain Commerce and Pathfinder Bancorp

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

Diversification Opportunities for Mountain Commerce and Pathfinder Bancorp

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Mountain and Pathfinder is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Commerce Bancorp and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder Bancorp and Mountain Commerce 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 Mountain Commerce Bancorp are associated (or correlated) with Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of Mountain Commerce i.e., Mountain Commerce and Pathfinder Bancorp go up and down completely randomly.

Pair Corralation between Mountain Commerce and Pathfinder Bancorp

Given the investment horizon of 90 days Mountain Commerce Bancorp is expected to under-perform the Pathfinder Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, Mountain Commerce Bancorp is 1.34 times less risky than Pathfinder Bancorp. The otc stock trades about -0.04 of its potential returns per unit of risk. The Pathfinder Bancorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,842  in Pathfinder Bancorp on November 19, 2024 and sell it today you would lose (120.00) from holding Pathfinder Bancorp or give up 6.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy42.83%
ValuesDaily Returns

Mountain Commerce Bancorp  vs.  Pathfinder Bancorp

 Performance 
       Timeline  
Mountain Commerce Bancorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Mountain Commerce Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Mountain Commerce is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Pathfinder Bancorp 

Risk-Adjusted Performance

Very Weak

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

Mountain Commerce and Pathfinder Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mountain Commerce and Pathfinder Bancorp

The main advantage of trading using opposite Mountain Commerce and Pathfinder Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Commerce position performs unexpectedly, Pathfinder Bancorp 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 Pathfinder Bancorp will offset losses from the drop in Pathfinder Bancorp's long position.
The idea behind Mountain Commerce Bancorp and Pathfinder Bancorp 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 CEOs Directory module to screen CEOs from public companies around the world.

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