Correlation Between Pioneer Bankcorp and American Riviera

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

By analyzing existing cross correlation between Pioneer Bankcorp and American Riviera Bank, you can compare the effects of market volatilities on Pioneer Bankcorp and American Riviera 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 Pioneer Bankcorp with a short position of American Riviera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Bankcorp and American Riviera.

Diversification Opportunities for Pioneer Bankcorp and American Riviera

0.75

Correlation Coefficient

Pioneer Bankcorp  American Riviera

Poor diversification

The 3 months correlation between Pioneer and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and American Riviera Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Riviera Bank and Pioneer Bankcorp 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 Pioneer Bankcorp are associated (or correlated) with American Riviera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Riviera Bank has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and American Riviera go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and American Riviera

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 1.22 times less return on investment than American Riviera. In addition to that, Pioneer Bankcorp is 1.03 times more volatile than American Riviera Bank. It trades about 0.2 of its total potential returns per unit of risk. American Riviera Bank is currently generating about 0.25 per unit of volatility. If you would invest  1,778  in American Riviera Bank on September 2, 2024 and sell it today you would earn a total of  209.00  from holding American Riviera Bank or generate 11.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Pioneer Bankcorp  vs.  American Riviera Bank

Pioneer Bankcorp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Pioneer Bankcorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

American Riviera Bank

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Riviera Bank are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, American Riviera may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pioneer Bankcorp and American Riviera

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

The idea behind Pioneer Bankcorp and American Riviera 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.