Correlation Between Pathfinder Bancorp and ChoiceOne Financial

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

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

Diversification Opportunities for Pathfinder Bancorp and ChoiceOne Financial

0.17

Correlation Coefficient

Pathfinder Bancorp  ChoiceOne Financial

Average diversification

The 3 months correlation between Pathfinder and ChoiceOne is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and ChoiceOne Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChoiceOne Financial and Pathfinder 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 Pathfinder Bancorp are associated (or correlated) with ChoiceOne Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChoiceOne Financial has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and ChoiceOne Financial go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and ChoiceOne Financial

Given the investment horizon of 90 days Pathfinder Bancorp is expected to generate 1.32 times more return on investment than ChoiceOne Financial. However, Pathfinder Bancorp is 1.32 times more volatile than ChoiceOne Financial Services. It trades about -0.1 of its potential returns per unit of risk. ChoiceOne Financial Services is currently generating about -0.25 per unit of risk. If you would invest  1,739  in Pathfinder Bancorp on December 30, 2024 and sell it today you would lose (197.00) from holding Pathfinder Bancorp or give up 11.33% of portfolio value over 90 days.

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

Pathfinder Bancorp  vs.  ChoiceOne Financial Services

Pathfinder Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pathfinder Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

ChoiceOne Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChoiceOne Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Pathfinder Bancorp and ChoiceOne Financial

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

The idea behind Pathfinder Bancorp and ChoiceOne Financial Services 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.