Correlation Between Benchmark Bankshares and Pioneer Bankcorp

Can any of the company-specific risk be diversified away by investing in both Benchmark Bankshares and Pioneer Bankcorp 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 Benchmark Bankshares and Pioneer Bankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Benchmark Bankshares and Pioneer Bankcorp, you can compare the effects of market volatilities on Benchmark Bankshares and Pioneer Bankcorp 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 Benchmark Bankshares with a short position of Pioneer Bankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Bankshares and Pioneer Bankcorp.

Diversification Opportunities for Benchmark Bankshares and Pioneer Bankcorp

0.94

Correlation Coefficient

Benchmark Bankshares  Pioneer Bankcorp

Almost no diversification

The 3 months correlation between Benchmark and Pioneer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Bankshares and Pioneer Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bankcorp and Benchmark Bankshares 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 Benchmark Bankshares are associated (or correlated) with Pioneer Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bankcorp has no effect on the direction of Benchmark Bankshares i.e., Benchmark Bankshares and Pioneer Bankcorp go up and down completely randomly.

Pair Corralation between Benchmark Bankshares and Pioneer Bankcorp

Given the investment horizon of 90 days Benchmark Bankshares is expected to generate 1.23 times less return on investment than Pioneer Bankcorp. In addition to that, Benchmark Bankshares is 1.86 times more volatile than Pioneer Bankcorp. It trades about 0.03 of its total potential returns per unit of risk. Pioneer Bankcorp is currently generating about 0.06 per unit of volatility. If you would invest  3,721  in Pioneer Bankcorp on October 5, 2024 and sell it today you would earn a total of  1,154  from holding Pioneer Bankcorp or generate 31.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	86.62%
Values	Daily Returns

Benchmark Bankshares  vs.  Pioneer Bankcorp

Benchmark Bankshares

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Bankshares are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, Benchmark Bankshares displayed solid returns over the last few months and may actually be approaching a breakup point.

Pioneer Bankcorp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking signals, Pioneer Bankcorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Benchmark Bankshares and Pioneer Bankcorp

The main advantage of trading using opposite Benchmark Bankshares and Pioneer Bankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Bankshares position performs unexpectedly, Pioneer Bankcorp 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 Pioneer Bankcorp will offset losses from the drop in Pioneer Bankcorp's long position.

The idea behind Benchmark Bankshares and Pioneer Bankcorp 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.