Correlation Between Citizens Financial and Pathfinder Bancorp

Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Pathfinder 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 Citizens Financial and Pathfinder Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Financial Services and Pathfinder Bancorp, you can compare the effects of market volatilities on Citizens Financial and Pathfinder 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 Citizens Financial with a short position of Pathfinder Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Pathfinder Bancorp.

Diversification Opportunities for Citizens Financial and Pathfinder Bancorp

0.72

Correlation Coefficient

Citizens Financial  Pathfinder Bancorp

Poor diversification

The 3 months correlation between Citizens and Pathfinder is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Services and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder Bancorp and Citizens Financial 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 Citizens Financial Services are associated (or correlated) with Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Pathfinder Bancorp go up and down completely randomly.

Pair Corralation between Citizens Financial and Pathfinder Bancorp

Given the investment horizon of 90 days Citizens Financial Services is expected to generate 1.39 times more return on investment than Pathfinder Bancorp. However, Citizens Financial is 1.39 times more volatile than Pathfinder Bancorp. It trades about 0.15 of its potential returns per unit of risk. Pathfinder Bancorp is currently generating about 0.06 per unit of risk. If you would invest  5,074  in Citizens Financial Services on September 3, 2024 and sell it today you would earn a total of  1,987  from holding Citizens Financial Services or generate 39.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citizens Financial Services  vs.  Pathfinder Bancorp

Citizens Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Citizens Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pathfinder Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pathfinder Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical indicators, Pathfinder Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citizens Financial and Pathfinder Bancorp

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

The idea behind Citizens Financial Services and Pathfinder Bancorp 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.