Correlation Between Pioneer Bancorp and First Financial
Can any of the company-specific risk be diversified away by investing in both Pioneer Bancorp and First Financial 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 Pioneer Bancorp and First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Bancorp and First Financial Northwest, you can compare the effects of market volatilities on Pioneer Bancorp and First Financial 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 Pioneer Bancorp with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Bancorp and First Financial.
Diversification Opportunities for Pioneer Bancorp and First Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pioneer and First is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bancorp and First Financial Northwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Northwest and Pioneer Bancorp 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 Pioneer Bancorp are associated (or correlated) with First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Northwest has no effect on the direction of Pioneer Bancorp i.e., Pioneer Bancorp and First Financial go up and down completely randomly.
Pair Corralation between Pioneer Bancorp and First Financial
Given the investment horizon of 90 days Pioneer Bancorp is expected to generate 0.75 times more return on investment than First Financial. However, Pioneer Bancorp is 1.34 times less risky than First Financial. It trades about 0.25 of its potential returns per unit of risk. First Financial Northwest is currently generating about -0.01 per unit of risk. If you would invest 1,126 in Pioneer Bancorp on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Pioneer Bancorp or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pioneer Bancorp vs. First Financial Northwest
Performance |
| Timeline |
| Pioneer Bancorp |
| First Financial Northwest |
Pioneer Bancorp and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Bancorp and First Financial
The main advantage of trading using opposite Pioneer Bancorp and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Bancorp position performs unexpectedly, First Financial 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 First Financial will offset losses from the drop in First Financial's long position.| Pioneer Bancorp vs. Home Federal Bancorp | Pioneer Bancorp vs. Lake Shore Bancorp | Pioneer Bancorp vs. Community West Bancshares | Pioneer Bancorp vs. Magyar Bancorp |
| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial vs. Community West Bancshares |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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