Correlation Between Pioneer Bankcorp and Southern California

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

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

Diversification Opportunities for Pioneer Bankcorp and Southern California

-0.06

Correlation Coefficient

Pioneer Bankcorp  Southern California

Good diversification

The 3 months correlation between Pioneer and Southern is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Southern California Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Southern California go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and Southern California

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.74 times more return on investment than Southern California. However, Pioneer Bankcorp is 1.35 times less risky than Southern California. It trades about 0.04 of its potential returns per unit of risk. Southern California Bancorp is currently generating about -0.15 per unit of risk. If you would invest  4,800  in Pioneer Bankcorp on December 29, 2024 and sell it today you would earn a total of  111.00  from holding Pioneer Bankcorp or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Pioneer Bankcorp  vs.  Southern California Bancorp

Pioneer Bankcorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Pioneer Bankcorp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Southern California

Risk-Adjusted Performance

Very Weak

Over the last 90 days Southern California Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pioneer Bankcorp and Southern California

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

The idea behind Pioneer Bankcorp and Southern California 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.