Correlation Between Pathfinder Bancorp and First National

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

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

Diversification Opportunities for Pathfinder Bancorp and First National

0.42

Correlation Coefficient

Pathfinder Bancorp  First National

Very weak diversification

The 3 months correlation between Pathfinder and First is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and First National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Bank 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Bank has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and First National go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and First National

Given the investment horizon of 90 days Pathfinder Bancorp is expected to generate 1.43 times more return on investment than First National. However, Pathfinder Bancorp is 1.43 times more volatile than First National Bank. It trades about 0.0 of its potential returns per unit of risk. First National Bank is currently generating about 0.0 per unit of risk. If you would invest  1,833  in Pathfinder Bancorp on October 11, 2024 and sell it today you would lose (188.00) from holding Pathfinder Bancorp or give up 10.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.36%
Values	Daily Returns

Pathfinder Bancorp  vs.  First National Bank

Pathfinder Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pathfinder Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Pathfinder Bancorp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

First National Bank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First National Bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, First National may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pathfinder Bancorp and First National

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

The idea behind Pathfinder Bancorp and First National Bank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.