Correlation Between William Penn and Pioneer Bankcorp

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

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

Diversification Opportunities for William Penn and Pioneer Bankcorp

0.84

Correlation Coefficient

William Penn  Pioneer Bankcorp

Very poor diversification

The 3 months correlation between William and Pioneer is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and Pioneer Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bankcorp and William Penn 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 William Penn Bancorp are associated (or correlated) with Pioneer Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bankcorp has no effect on the direction of William Penn i.e., William Penn and Pioneer Bankcorp go up and down completely randomly.

Pair Corralation between William Penn and Pioneer Bankcorp

Given the investment horizon of 90 days William Penn Bancorp is expected to generate 1.72 times more return on investment than Pioneer Bankcorp. However, William Penn is 1.72 times more volatile than Pioneer Bankcorp. It trades about 0.15 of its potential returns per unit of risk. Pioneer Bankcorp is currently generating about 0.24 per unit of risk. If you would invest  1,162  in William Penn Bancorp on September 12, 2024 and sell it today you would earn a total of  149.00  from holding William Penn Bancorp or generate 12.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

William Penn Bancorp  vs.  Pioneer Bankcorp

William Penn Bancorp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in William Penn Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, William Penn may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pioneer Bankcorp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 18 (%) 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 January 2025.

Pair Trading with William Penn and Pioneer Bankcorp

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

The idea behind William Penn Bancorp and Pioneer 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.