Correlation Between Pathfinder Bancorp and Rhinebeck Bancorp

Can any of the company-specific risk be diversified away by investing in both Pathfinder Bancorp and Rhinebeck 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 Rhinebeck 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 Rhinebeck Bancorp, you can compare the effects of market volatilities on Pathfinder Bancorp and Rhinebeck 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 Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pathfinder Bancorp and Rhinebeck Bancorp.

Diversification Opportunities for Pathfinder Bancorp and Rhinebeck Bancorp

0.02

Correlation Coefficient

Pathfinder Bancorp  Rhinebeck Bancorp

Significant diversification

The 3 months correlation between Pathfinder and Rhinebeck is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck 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 Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and Rhinebeck Bancorp go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and Rhinebeck Bancorp

Given the investment horizon of 90 days Pathfinder Bancorp is expected to under-perform the Rhinebeck Bancorp. In addition to that, Pathfinder Bancorp is 1.69 times more volatile than Rhinebeck Bancorp. It trades about -0.05 of its total potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.05 per unit of volatility. If you would invest  963.00  in Rhinebeck Bancorp on December 28, 2024 and sell it today you would earn a total of  27.00  from holding Rhinebeck Bancorp or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Pathfinder Bancorp  vs.  Rhinebeck Bancorp

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.

Rhinebeck Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rhinebeck Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Rhinebeck Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pathfinder Bancorp and Rhinebeck Bancorp

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

The idea behind Pathfinder Bancorp and Rhinebeck 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.