Correlation Between Pioneer Bankcorp and Security Federal

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

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

Diversification Opportunities for Pioneer Bankcorp and Security Federal

0.41

Correlation Coefficient

Pioneer Bankcorp  Security Federal

Very weak diversification

The 3 months correlation between Pioneer and Security is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Security Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Federal 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 Security Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Federal has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Security Federal go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and Security Federal

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.95 times more return on investment than Security Federal. However, Pioneer Bankcorp is 1.06 times less risky than Security Federal. It trades about 0.2 of its potential returns per unit of risk. Security Federal is currently generating about 0.05 per unit of risk. If you would invest  4,286  in Pioneer Bankcorp on September 2, 2024 and sell it today you would earn a total of  414.00  from holding Pioneer Bankcorp or generate 9.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Pioneer Bankcorp  vs.  Security Federal

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.

Security Federal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Security Federal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Security Federal is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pioneer Bankcorp and Security Federal

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

The idea behind Pioneer Bankcorp and Security Federal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..