Correlation Between First Capital and Pathfinder Bancorp

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

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

Diversification Opportunities for First Capital and Pathfinder Bancorp

-0.71

Correlation Coefficient

First Capital  Pathfinder Bancorp

Pay attention - limited upside

The 3 months correlation between First and Pathfinder is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder Bancorp and First Capital 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 First Capital are associated (or correlated) with Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of First Capital i.e., First Capital and Pathfinder Bancorp go up and down completely randomly.

Pair Corralation between First Capital and Pathfinder Bancorp

Given the investment horizon of 90 days First Capital is expected to under-perform the Pathfinder Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, First Capital is 1.47 times less risky than Pathfinder Bancorp. The stock trades about -0.21 of its potential returns per unit of risk. The Pathfinder Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,478  in Pathfinder Bancorp on March 9, 2025 and sell it today you would earn a total of  47.00  from holding Pathfinder Bancorp or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Capital  vs.  Pathfinder Bancorp

First Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, First Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pathfinder Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pathfinder Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with First Capital and Pathfinder Bancorp

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

The idea behind First Capital and Pathfinder 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.