Correlation Between Kearny Financial and FVCBankcorp
Can any of the company-specific risk be diversified away by investing in both Kearny Financial and FVCBankcorp 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 Kearny Financial and FVCBankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kearny Financial Corp and FVCBankcorp, you can compare the effects of market volatilities on Kearny Financial and FVCBankcorp 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 Kearny Financial with a short position of FVCBankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kearny Financial and FVCBankcorp.
Diversification Opportunities for Kearny Financial and FVCBankcorp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kearny and FVCBankcorp is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kearny Financial Corp and FVCBankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FVCBankcorp and Kearny Financial 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 Kearny Financial Corp are associated (or correlated) with FVCBankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FVCBankcorp has no effect on the direction of Kearny Financial i.e., Kearny Financial and FVCBankcorp go up and down completely randomly.
Pair Corralation between Kearny Financial and FVCBankcorp
Given the investment horizon of 90 days Kearny Financial Corp is expected to generate 1.62 times more return on investment than FVCBankcorp. However, Kearny Financial is 1.62 times more volatile than FVCBankcorp. It trades about 0.16 of its potential returns per unit of risk. FVCBankcorp is currently generating about 0.06 per unit of risk. If you would invest 712.00 in Kearny Financial Corp on August 24, 2024 and sell it today you would earn a total of 107.00 from holding Kearny Financial Corp or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kearny Financial Corp vs. FVCBankcorp
Performance |
| Timeline |
| Kearny Financial Corp |
| FVCBankcorp |
Kearny Financial and FVCBankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kearny Financial and FVCBankcorp
The main advantage of trading using opposite Kearny Financial and FVCBankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kearny Financial position performs unexpectedly, FVCBankcorp 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 FVCBankcorp will offset losses from the drop in FVCBankcorp's long position.| Kearny Financial vs. National Bank Holdings | Kearny Financial vs. Community West Bancshares | Kearny Financial vs. Financial Institutions | Kearny Financial vs. Heritage Financial |
| FVCBankcorp vs. Home Federal Bancorp | FVCBankcorp vs. First Financial Northwest | FVCBankcorp vs. First Northwest Bancorp | FVCBankcorp vs. First Capital |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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