Correlation Between Pioneer Bankcorp and Nordea Bank

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

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

Diversification Opportunities for Pioneer Bankcorp and Nordea Bank

-0.43

Correlation Coefficient

Pioneer Bankcorp  Nordea Bank

Very good diversification

The 3 months correlation between Pioneer and Nordea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp 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 Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and Nordea Bank go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and Nordea Bank

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.53 times more return on investment than Nordea Bank. However, Pioneer Bankcorp is 1.9 times less risky than Nordea Bank. It trades about 0.2 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.02 per unit of risk. If you would invest  4,286  in Pioneer Bankcorp on September 4, 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 Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Pioneer Bankcorp  vs.  Nordea Bank Abp

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.

Nordea Bank Abp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordea Bank Abp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Nordea Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pioneer Bankcorp and Nordea Bank

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

The idea behind Pioneer Bankcorp and Nordea Bank Abp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.