Correlation Between Pathfinder Bancorp and Village Bank

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

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

Diversification Opportunities for Pathfinder Bancorp and Village Bank

-0.01

Correlation Coefficient

Pathfinder Bancorp  Village Bank

Good diversification

The 3 months correlation between Pathfinder and Village is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pathfinder Bancorp and Village Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Bank and Pathfinder Bancorp 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 Pathfinder Bancorp are associated (or correlated) with Village Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Bank has no effect on the direction of Pathfinder Bancorp i.e., Pathfinder Bancorp and Village Bank go up and down completely randomly.

Pair Corralation between Pathfinder Bancorp and Village Bank

Given the investment horizon of 90 days Pathfinder Bancorp is expected to under-perform the Village Bank. But the stock apears to be less risky and, when comparing its historical volatility, Pathfinder Bancorp is 1.08 times less risky than Village Bank. The stock trades about -0.02 of its potential returns per unit of risk. The Village Bank and is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,826  in Village Bank and on February 9, 2024 and sell it today you would lose (544.00) from holding Village Bank and or give up 11.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.6%
Values	Daily Returns

Pathfinder Bancorp  vs.  Village Bank and

Pathfinder Bancorp

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pathfinder Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Pathfinder Bancorp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Village Bank

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Village Bank and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Village Bank is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pathfinder Bancorp and Village Bank

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

The idea behind Pathfinder Bancorp and Village Bank and 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.