Correlation Between Pioneer Bancorp and HV Bancorp

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

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

Diversification Opportunities for Pioneer Bancorp and HV Bancorp

0.33

Correlation Coefficient

Pioneer Bancorp  HV Bancorp

Weak diversification

The 3 months correlation between Pioneer and HVBC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bancorp and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and Pioneer Bancorp 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 Bancorp are associated (or correlated) with HV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HV Bancorp has no effect on the direction of Pioneer Bancorp i.e., Pioneer Bancorp and HV Bancorp go up and down completely randomly.

Pair Corralation between Pioneer Bancorp and HV Bancorp

Given the investment horizon of 90 days Pioneer Bancorp is expected to generate 7.84 times less return on investment than HV Bancorp. But when comparing it to its historical volatility, Pioneer Bancorp is 1.06 times less risky than HV Bancorp. It trades about 0.01 of its potential returns per unit of risk. HV Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,764  in HV Bancorp on September 18, 2024 and sell it today you would earn a total of  696.00  from holding HV Bancorp or generate 25.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	24.04%
Values	Daily Returns

Pioneer Bancorp  vs.  HV Bancorp

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.

HV Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pioneer Bancorp and HV Bancorp

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

The idea behind Pioneer Bancorp and HV 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.