Correlation Between Nasdaq and Pioneer Bancorp

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

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

Diversification Opportunities for Nasdaq and Pioneer Bancorp

0.93

Correlation Coefficient

Nasdaq  Pioneer Bancorp

Almost no diversification

The 3 months correlation between Nasdaq and Pioneer is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Pioneer Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bancorp and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Pioneer Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bancorp has no effect on the direction of Nasdaq i.e., Nasdaq and Pioneer Bancorp go up and down completely randomly.

Pair Corralation between Nasdaq and Pioneer Bancorp

Given the investment horizon of 90 days Nasdaq is expected to generate 1.1 times less return on investment than Pioneer Bancorp. In addition to that, Nasdaq is 1.18 times more volatile than Pioneer Bancorp. It trades about 0.07 of its total potential returns per unit of risk. Pioneer Bancorp is currently generating about 0.09 per unit of volatility. If you would invest  1,153  in Pioneer Bancorp on September 17, 2024 and sell it today you would earn a total of  15.00  from holding Pioneer Bancorp or generate 1.3% return on investment over 90 days.

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

Nasdaq Inc  vs.  Pioneer Bancorp

Nasdaq Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pioneer Bancorp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Pioneer Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nasdaq and Pioneer Bancorp

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

The idea behind Nasdaq Inc and Pioneer 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 Global Correlations module to find global opportunities by holding instruments from different markets.