Correlation Between Pioneer Bancorp and Whiting Petroleum

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

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

Diversification Opportunities for Pioneer Bancorp and Whiting Petroleum

-0.67

Correlation Coefficient

Pioneer Bancorp  Whiting Petroleum

Excellent diversification

The 3 months correlation between Pioneer and Whiting is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bancorp and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of Pioneer Bancorp i.e., Pioneer Bancorp and Whiting Petroleum go up and down completely randomly.

Pair Corralation between Pioneer Bancorp and Whiting Petroleum

Given the investment horizon of 90 days Pioneer Bancorp is expected to generate 2.08 times less return on investment than Whiting Petroleum. But when comparing it to its historical volatility, Pioneer Bancorp is 12.17 times less risky than Whiting Petroleum. It trades about 0.08 of its potential returns per unit of risk. Whiting Petroleum is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Whiting Petroleum on December 21, 2024 and sell it today you would lose (100.00) from holding Whiting Petroleum or give up 35.71% of portfolio value over 90 days.

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

Pioneer Bancorp  vs.  Whiting Petroleum

Pioneer Bancorp

Risk-Adjusted Performance

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.

Whiting Petroleum

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Whiting Petroleum are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Whiting Petroleum showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Bancorp and Whiting Petroleum

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

The idea behind Pioneer Bancorp and Whiting Petroleum 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 Anywhere module to track or share privately all of your investments from the convenience of any device.