Correlation Between Kentucky First and OceanFirst Financial
Can any of the company-specific risk be diversified away by investing in both Kentucky First and OceanFirst Financial 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 Kentucky First and OceanFirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky First Federal and OceanFirst Financial Corp, you can compare the effects of market volatilities on Kentucky First and OceanFirst Financial 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 Kentucky First with a short position of OceanFirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky First and OceanFirst Financial.
Diversification Opportunities for Kentucky First and OceanFirst Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kentucky and OceanFirst is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky First Federal and OceanFirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanFirst Financial Corp and Kentucky First 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 Kentucky First Federal are associated (or correlated) with OceanFirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanFirst Financial Corp has no effect on the direction of Kentucky First i.e., Kentucky First and OceanFirst Financial go up and down completely randomly.
Pair Corralation between Kentucky First and OceanFirst Financial
Given the investment horizon of 90 days Kentucky First Federal is expected to under-perform the OceanFirst Financial. In addition to that, Kentucky First is 1.47 times more volatile than OceanFirst Financial Corp. It trades about -0.05 of its total potential returns per unit of risk. OceanFirst Financial Corp is currently generating about 0.03 per unit of volatility. If you would invest 2,167 in OceanFirst Financial Corp on August 26, 2024 and sell it today you would earn a total of 353.00 from holding OceanFirst Financial Corp or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Kentucky First Federal vs. OceanFirst Financial Corp
Performance |
| Timeline |
| Kentucky First Federal |
| OceanFirst Financial Corp |
Kentucky First and OceanFirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky First and OceanFirst Financial
The main advantage of trading using opposite Kentucky First and OceanFirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky First position performs unexpectedly, OceanFirst Financial 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 OceanFirst Financial will offset losses from the drop in OceanFirst Financial's long position.| Kentucky First vs. Home Federal Bancorp | Kentucky First vs. Lake Shore Bancorp | Kentucky First vs. Commerzbank AG | Kentucky First vs. Investar Holding Corp |
| OceanFirst Financial vs. Capital One Financial | OceanFirst Financial vs. Capital One Financial | OceanFirst Financial vs. Bank of America | OceanFirst Financial vs. KeyCorp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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