Correlation Between Pioneer Bankcorp and Colony Bankcorp

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

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

Diversification Opportunities for Pioneer Bankcorp and Colony Bankcorp

0.69

Correlation Coefficient

Pioneer Bankcorp  Colony Bankcorp

Poor diversification

The 3 months correlation between Pioneer and Colony is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Colony Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colony Bankcorp 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 Colony Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colony Bankcorp has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Colony Bankcorp go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and Colony Bankcorp

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.28 times more return on investment than Colony Bankcorp. However, Pioneer Bankcorp is 3.63 times less risky than Colony Bankcorp. It trades about 0.31 of its potential returns per unit of risk. Colony Bankcorp is currently generating about 0.06 per unit of risk. If you would invest  4,435  in Pioneer Bankcorp on October 6, 2024 and sell it today you would earn a total of  565.00  from holding Pioneer Bankcorp or generate 12.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Pioneer Bankcorp  vs.  Colony Bankcorp

Pioneer Bankcorp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking signals, Pioneer Bankcorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Colony Bankcorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Colony Bankcorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Colony Bankcorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pioneer Bankcorp and Colony Bankcorp

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

The idea behind Pioneer Bankcorp and Colony Bankcorp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.