Correlation Between Pioneer Bankcorp and FineMark Holdings

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

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

Diversification Opportunities for Pioneer Bankcorp and FineMark Holdings

0.44

Correlation Coefficient

Pioneer Bankcorp  FineMark Holdings

Very weak diversification

The 3 months correlation between Pioneer and FineMark is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and FineMark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMark Holdings 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 FineMark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMark Holdings has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and FineMark Holdings go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and FineMark Holdings

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 1.97 times more return on investment than FineMark Holdings. However, Pioneer Bankcorp is 1.97 times more volatile than FineMark Holdings. It trades about 0.04 of its potential returns per unit of risk. FineMark Holdings is currently generating about -0.06 per unit of risk. If you would invest  4,800  in Pioneer Bankcorp on December 30, 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 Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Pioneer Bankcorp  vs.  FineMark Holdings

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.

FineMark Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days FineMark Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, FineMark Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pioneer Bankcorp and FineMark Holdings

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

The idea behind Pioneer Bankcorp and FineMark Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.