Correlation Between Pioneer Bankcorp and Merchants Marine

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

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

Diversification Opportunities for Pioneer Bankcorp and Merchants Marine

-0.44

Correlation Coefficient

Pioneer Bankcorp  Merchants Marine

Very good diversification

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

Pair Corralation between Pioneer Bankcorp and Merchants Marine

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.32 times more return on investment than Merchants Marine. However, Pioneer Bankcorp is 3.08 times less risky than Merchants Marine. It trades about 0.25 of its potential returns per unit of risk. Merchants Marine Bancorp is currently generating about -0.01 per unit of risk. If you would invest  4,435  in Pioneer Bankcorp on September 25, 2024 and sell it today you would earn a total of  365.00  from holding Pioneer Bankcorp or generate 8.23% return on investment over 90 days.

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

Pioneer Bankcorp  vs.  Merchants Marine Bancorp

Pioneer Bankcorp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bankcorp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Pioneer Bankcorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Merchants Marine Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merchants Marine Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Merchants Marine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pioneer Bankcorp and Merchants Marine

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

The idea behind Pioneer Bankcorp and Merchants Marine 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.