Correlation Between Security Federal and Pioneer Bankcorp

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

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

Diversification Opportunities for Security Federal and Pioneer Bankcorp

0.76

Correlation Coefficient

Security Federal  Pioneer Bankcorp

Poor diversification

The 3 months correlation between Security and Pioneer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Security Federal and Pioneer Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bankcorp and Security Federal 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 Security Federal are associated (or correlated) with Pioneer Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bankcorp has no effect on the direction of Security Federal i.e., Security Federal and Pioneer Bankcorp go up and down completely randomly.

Pair Corralation between Security Federal and Pioneer Bankcorp

Given the investment horizon of 90 days Security Federal is expected to generate 44.57 times less return on investment than Pioneer Bankcorp. In addition to that, Security Federal is 1.54 times more volatile than Pioneer Bankcorp. It trades about 0.0 of its total potential returns per unit of risk. Pioneer Bankcorp is currently generating about 0.25 per unit of volatility. 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 Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Security Federal  vs.  Pioneer Bankcorp

Security Federal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Security Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Security Federal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Security Federal and Pioneer Bankcorp

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

The idea behind Security Federal and Pioneer Bankcorp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.