Correlation Between Pathfinder Bancorp and Prime Meridian
Can any of the company-specific risk be diversified away by investing in both Pathfinder Bancorp and Prime Meridian 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 Pathfinder Bancorp and Prime Meridian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pathfinder Bancorp and Prime Meridian Holding, you can compare the effects of market volatilities on Pathfinder Bancorp and Prime Meridian 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 Pathfinder Bancorp with a short position of Prime Meridian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pathfinder Bancorp and Prime Meridian.
Diversification Opportunities for Pathfinder Bancorp and Prime Meridian
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pathfinder and Prime is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and Prime Meridian Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Meridian Holding and Pathfinder 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 Pathfinder Bancorp are associated (or correlated) with Prime Meridian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Meridian Holding has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and Prime Meridian go up and down completely randomly.
Pair Corralation between Pathfinder Bancorp and Prime Meridian
Given the investment horizon of 90 days Pathfinder Bancorp is expected to under-perform the Prime Meridian. In addition to that, Pathfinder Bancorp is 1.61 times more volatile than Prime Meridian Holding. It trades about -0.03 of its total potential returns per unit of risk. Prime Meridian Holding is currently generating about 0.45 per unit of volatility. If you would invest 2,571 in Prime Meridian Holding on August 28, 2024 and sell it today you would earn a total of 328.00 from holding Prime Meridian Holding or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pathfinder Bancorp vs. Prime Meridian Holding
Performance |
| Timeline |
| Pathfinder Bancorp |
| Prime Meridian Holding |
Pathfinder Bancorp and Prime Meridian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pathfinder Bancorp and Prime Meridian
The main advantage of trading using opposite Pathfinder Bancorp and Prime Meridian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pathfinder Bancorp position performs unexpectedly, Prime Meridian 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 Prime Meridian will offset losses from the drop in Prime Meridian's long position.| Pathfinder Bancorp vs. Home Federal Bancorp | Pathfinder Bancorp vs. Lake Shore Bancorp | Pathfinder Bancorp vs. Magyar Bancorp | Pathfinder Bancorp vs. Community West Bancshares |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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