Correlation Between Pathfinder Bancorp and First Bancshares,

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

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

Diversification Opportunities for Pathfinder Bancorp and First Bancshares,

0.26

Correlation Coefficient

Pathfinder Bancorp  First Bancshares,

Modest diversification

The 3 months correlation between Pathfinder and First is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, 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 Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares, has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and First Bancshares, go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and First Bancshares,

Given the investment horizon of 90 days Pathfinder Bancorp is expected to generate 1.03 times more return on investment than First Bancshares,. However, Pathfinder Bancorp is 1.03 times more volatile than The First Bancshares,. It trades about 0.01 of its potential returns per unit of risk. The First Bancshares, is currently generating about -0.03 per unit of risk. If you would invest  1,709  in Pathfinder Bancorp on December 1, 2024 and sell it today you would earn a total of  1.00  from holding Pathfinder Bancorp or generate 0.06% return on investment over 90 days.

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

Pathfinder Bancorp  vs.  The First Bancshares,

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 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 Bancshares,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The First Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, First Bancshares, is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pathfinder Bancorp and First Bancshares,

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

The idea behind Pathfinder Bancorp and The First Bancshares, 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.