Correlation Between Pathfinder Bancorp and Focusrite Plc

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

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

Diversification Opportunities for Pathfinder Bancorp and Focusrite Plc

-0.48

Correlation Coefficient

Pathfinder Bancorp  Focusrite Plc

Very good diversification

The 3 months correlation between Pathfinder and Focusrite is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and Focusrite plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focusrite plc 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 Focusrite Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focusrite plc has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and Focusrite Plc go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and Focusrite Plc

Given the investment horizon of 90 days Pathfinder Bancorp is expected to generate 1.63 times more return on investment than Focusrite Plc. However, Pathfinder Bancorp is 1.63 times more volatile than Focusrite plc. It trades about 0.1 of its potential returns per unit of risk. Focusrite plc is currently generating about -0.08 per unit of risk. If you would invest  1,302  in Pathfinder Bancorp on September 28, 2024 and sell it today you would earn a total of  453.00  from holding Pathfinder Bancorp or generate 34.79% return on investment over 90 days.

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

Pathfinder Bancorp  vs.  Focusrite plc

Pathfinder Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pathfinder Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical indicators, Pathfinder Bancorp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Focusrite plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Focusrite plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Focusrite Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pathfinder Bancorp and Focusrite Plc

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

The idea behind Pathfinder Bancorp and Focusrite plc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..