Correlation Between Pioneer Bancorp and Investar Holding

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

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

Diversification Opportunities for Pioneer Bancorp and Investar Holding

0.88

Correlation Coefficient

Pioneer Bancorp  Investar Holding

Very poor diversification

The 3 months correlation between Pioneer and Investar is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bancorp and Investar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investar Holding Corp 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 Investar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investar Holding Corp has no effect on the direction of Pioneer Bancorp i.e., Pioneer Bancorp and Investar Holding go up and down completely randomly.

Pair Corralation between Pioneer Bancorp and Investar Holding

Given the investment horizon of 90 days Pioneer Bancorp is expected to generate 1.29 times less return on investment than Investar Holding. But when comparing it to its historical volatility, Pioneer Bancorp is 1.27 times less risky than Investar Holding. It trades about 0.06 of its potential returns per unit of risk. Investar Holding Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,588  in Investar Holding Corp on October 22, 2024 and sell it today you would earn a total of  424.00  from holding Investar Holding Corp or generate 26.7% return on investment over 90 days.

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

Pioneer Bancorp  vs.  Investar Holding Corp

Pioneer Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneer Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Investar Holding Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Investar Holding Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Investar Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pioneer Bancorp and Investar Holding

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

The idea behind Pioneer Bancorp and Investar Holding Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.