Correlation Between Kearny Financial and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both Kearny Financial and Rhinebeck 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 Kearny Financial and Rhinebeck Bancorp 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 Rhinebeck Bancorp, you can compare the effects of market volatilities on Kearny Financial and Rhinebeck 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 Kearny Financial with a short position of Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kearny Financial and Rhinebeck Bancorp.
Diversification Opportunities for Kearny Financial and Rhinebeck Bancorp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kearny and Rhinebeck is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kearny Financial Corp and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp 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 Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Kearny Financial i.e., Kearny Financial and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between Kearny Financial and Rhinebeck Bancorp
Given the investment horizon of 90 days Kearny Financial Corp is expected to generate 4.93 times more return on investment than Rhinebeck Bancorp. However, Kearny Financial is 4.93 times more volatile than Rhinebeck Bancorp. It trades about 0.15 of its potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.4 per unit of risk. If you would invest 696.00 in Kearny Financial Corp on August 30, 2024 and sell it today you would earn a total of 97.00 from holding Kearny Financial Corp or generate 13.94% 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. Rhinebeck Bancorp
Performance |
| Timeline |
| Kearny Financial Corp |
| Rhinebeck Bancorp |
Kearny Financial and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kearny Financial and Rhinebeck Bancorp
The main advantage of trading using opposite Kearny Financial and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kearny Financial position performs unexpectedly, Rhinebeck 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 Rhinebeck Bancorp will offset losses from the drop in Rhinebeck Bancorp'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 |
| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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