Correlation Between Pioneer Bankcorp and China Minsh

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

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

Diversification Opportunities for Pioneer Bankcorp and China Minsh

0.57

Correlation Coefficient

Pioneer Bankcorp  China Minsh

Very weak diversification

The 3 months correlation between Pioneer and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh 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 China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and China Minsh go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and China Minsh

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 1.59 times less return on investment than China Minsh. But when comparing it to its historical volatility, Pioneer Bankcorp is 4.06 times less risky than China Minsh. It trades about 0.2 of its potential returns per unit of risk. China Minsh is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  337.00  in China Minsh on September 4, 2024 and sell it today you would earn a total of  43.00  from holding China Minsh or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Pioneer Bankcorp  vs.  China Minsh

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 uncertain forward-looking signals, Pioneer Bankcorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

China Minsh

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Minsh are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, China Minsh showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Bankcorp and China Minsh

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

The idea behind Pioneer Bankcorp and China Minsh 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.