Correlation Between Pioneer Bankcorp and Embassy Bancorp
Can any of the company-specific risk be diversified away by investing in both Pioneer Bankcorp and Embassy 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 Pioneer Bankcorp and Embassy Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Bankcorp and Embassy Bancorp, you can compare the effects of market volatilities on Pioneer Bankcorp and Embassy 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 Pioneer Bankcorp with a short position of Embassy Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Bankcorp and Embassy Bancorp.
Diversification Opportunities for Pioneer Bankcorp and Embassy Bancorp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pioneer and Embassy is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Embassy Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embassy Bancorp and Pioneer Bankcorp 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 Bankcorp are associated (or correlated) with Embassy Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embassy Bancorp has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Embassy Bancorp go up and down completely randomly.
Pair Corralation between Pioneer Bankcorp and Embassy Bancorp
Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.36 times more return on investment than Embassy Bancorp. However, Pioneer Bankcorp is 2.77 times less risky than Embassy Bancorp. It trades about 0.05 of its potential returns per unit of risk. Embassy Bancorp is currently generating about 0.01 per unit of risk. If you would invest 4,024 in Pioneer Bankcorp on November 2, 2024 and sell it today you would earn a total of 976.00 from holding Pioneer Bankcorp or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Pioneer Bankcorp vs. Embassy Bancorp
Performance |
| Timeline |
| Pioneer Bankcorp |
| Embassy Bancorp |
Pioneer Bankcorp and Embassy Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Bankcorp and Embassy Bancorp
The main advantage of trading using opposite Pioneer Bankcorp and Embassy Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Bankcorp position performs unexpectedly, Embassy 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 Embassy Bancorp will offset losses from the drop in Embassy Bancorp's long position.| Pioneer Bankcorp vs. FineMark Holdings | Pioneer Bankcorp vs. Oxford Bank | Pioneer Bankcorp vs. Prime Meridian Holding | Pioneer Bankcorp vs. Oconee Financial |
| Embassy Bancorp vs. Pioneer Bankcorp | Embassy Bancorp vs. Liberty Northwest Bancorp | Embassy Bancorp vs. First Community | Embassy Bancorp vs. Coeur dAlene Bancorp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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