Correlation Between Pioneer Bankcorp and United Bancorporation

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

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

Diversification Opportunities for Pioneer Bankcorp and United Bancorporation

0.82

Correlation Coefficient

Pioneer Bankcorp  United Bancorporation

Very poor diversification

The 3 months correlation between Pioneer and United is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Bankcorp and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation 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 United Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorporation has no effect on the direction of Pioneer Bankcorp i.e., Pioneer Bankcorp and United Bancorporation go up and down completely randomly.

Pair Corralation between Pioneer Bankcorp and United Bancorporation

Given the investment horizon of 90 days Pioneer Bankcorp is expected to generate 0.61 times more return on investment than United Bancorporation. However, Pioneer Bankcorp is 1.64 times less risky than United Bancorporation. It trades about 0.22 of its potential returns per unit of risk. United Bancorporation of is currently generating about -0.22 per unit of risk. If you would invest  4,700  in Pioneer Bankcorp on September 25, 2024 and sell it today you would earn a total of  100.00  from holding Pioneer Bankcorp or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Pioneer Bankcorp  vs.  United Bancorp. of

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.

United Bancorporation

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Bancorporation of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United Bancorporation sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Bankcorp and United Bancorporation

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

The idea behind Pioneer Bankcorp and United Bancorporation of 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.