Correlation Between Zions Bancorporation and Pathfinder Bancorp

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

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

Diversification Opportunities for Zions Bancorporation and Pathfinder Bancorp

0.12

Correlation Coefficient

Zions Bancorporation  Pathfinder Bancorp

Average diversification

The 3 months correlation between Zions and Pathfinder is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder Bancorp and Zions Bancorporation 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 Zions Bancorporation are associated (or correlated) with Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of Zions Bancorporation i.e., Zions Bancorporation and Pathfinder Bancorp go up and down completely randomly.

Pair Corralation between Zions Bancorporation and Pathfinder Bancorp

Given the investment horizon of 90 days Zions Bancorporation is expected to under-perform the Pathfinder Bancorp. In addition to that, Zions Bancorporation is 1.85 times more volatile than Pathfinder Bancorp. It trades about -0.25 of its total potential returns per unit of risk. Pathfinder Bancorp is currently generating about 0.16 per unit of volatility. If you would invest  1,670  in Pathfinder Bancorp on December 4, 2024 and sell it today you would earn a total of  51.00  from holding Pathfinder Bancorp or generate 3.05% return on investment over 90 days.

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

Zions Bancorp.  vs.  Pathfinder Bancorp

Zions Bancorporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zions Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pathfinder Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pathfinder Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Pathfinder Bancorp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zions Bancorporation and Pathfinder Bancorp

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

The idea behind Zions Bancorporation and Pathfinder 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.