Correlation Between Oconee Federal and Pioneer Bancorp

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

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

Diversification Opportunities for Oconee Federal and Pioneer Bancorp

-0.78

Correlation Coefficient

Oconee Federal  Pioneer Bancorp

Pay attention - limited upside

The 3 months correlation between Oconee and Pioneer is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and Pioneer Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bancorp and Oconee Federal 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 Oconee Federal Financial 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 Oconee Federal i.e., Oconee Federal and Pioneer Bancorp go up and down completely randomly.

Pair Corralation between Oconee Federal and Pioneer Bancorp

Given the investment horizon of 90 days Oconee Federal Financial is expected to under-perform the Pioneer Bancorp. In addition to that, Oconee Federal is 1.39 times more volatile than Pioneer Bancorp. It trades about -0.11 of its total potential returns per unit of risk. Pioneer Bancorp is currently generating about 0.01 per unit of volatility. If you would invest  1,146  in Pioneer Bancorp on September 18, 2024 and sell it today you would earn a total of  41.00  from holding Pioneer Bancorp or generate 3.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.89%
Values	Daily Returns

Oconee Federal Financial  vs.  Pioneer Bancorp

Oconee Federal Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oconee Federal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oconee Federal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pioneer Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bancorp are ranked lower than 7 (%) 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 Oconee Federal and Pioneer Bancorp

The main advantage of trading using opposite Oconee Federal and Pioneer Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal 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 Oconee Federal Financial 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.