Correlation Between Pioneer Bankcorp and Fentura Financial
Can any of the company-specific risk be diversified away by investing in both Pioneer Bankcorp and Fentura 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 Bankcorp and Fentura Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Bankcorp and Fentura Financial, you can compare the effects of market volatilities on Pioneer Bankcorp and Fentura 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 Bankcorp with a short position of Fentura Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Bankcorp and Fentura Financial.
Diversification Opportunities for Pioneer Bankcorp and Fentura Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pioneer and Fentura is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Fentura Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fentura Financial 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 Fentura Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fentura Financial has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Fentura Financial go up and down completely randomly.
Pair Corralation between Pioneer Bankcorp and Fentura Financial
Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 3.23 times less return on investment than Fentura Financial. But when comparing it to its historical volatility, Pioneer Bankcorp is 2.72 times less risky than Fentura Financial. It trades about 0.22 of its potential returns per unit of risk. Fentura Financial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,325 in Fentura Financial on September 1, 2024 and sell it today you would earn a total of 2,225 from holding Fentura Financial or generate 95.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer Bankcorp vs. Fentura Financial
Performance |
| Timeline |
| Pioneer Bankcorp |
| Fentura Financial |
Pioneer Bankcorp and Fentura Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Bankcorp and Fentura Financial
The main advantage of trading using opposite Pioneer Bankcorp and Fentura Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Bankcorp position performs unexpectedly, Fentura 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 Fentura Financial will offset losses from the drop in Fentura Financial's long position.| Pioneer Bankcorp vs. FineMark Holdings | Pioneer Bankcorp vs. Oxford Bank | Pioneer Bankcorp vs. Prime Meridian Holding | Pioneer Bankcorp vs. Oconee Financial |
| Fentura Financial vs. Pioneer Bankcorp | Fentura Financial vs. Liberty Northwest Bancorp | Fentura Financial vs. First Community | Fentura Financial 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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