Correlation Between Pathfinder Bancorp and IF Bancorp

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

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

Diversification Opportunities for Pathfinder Bancorp and IF Bancorp

0.14

Correlation Coefficient

Pathfinder Bancorp  IF Bancorp

Average diversification

The 3 months correlation between Pathfinder and IROQ is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and IF Bancorp go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and IF Bancorp

Given the investment horizon of 90 days Pathfinder Bancorp is expected to under-perform the IF Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Pathfinder Bancorp is 1.0 times less risky than IF Bancorp. The stock trades about -0.16 of its potential returns per unit of risk. The IF Bancorp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,367  in IF Bancorp on October 11, 2024 and sell it today you would lose (67.00) from holding IF Bancorp or give up 2.83% 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.  IF Bancorp

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.

IF Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IF Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IF Bancorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pathfinder Bancorp and IF Bancorp

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

The idea behind Pathfinder Bancorp and IF Bancorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.