Correlation Between Regions Financial and Kearny Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Kearny 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 Regions Financial and Kearny Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Kearny Financial Corp, you can compare the effects of market volatilities on Regions Financial and Kearny 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 Regions Financial with a short position of Kearny Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Kearny Financial.
Diversification Opportunities for Regions Financial and Kearny Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Kearny is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Kearny Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kearny Financial Corp and Regions 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 Regions Financial are associated (or correlated) with Kearny Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kearny Financial Corp has no effect on the direction of Regions Financial i.e., Regions Financial and Kearny Financial go up and down completely randomly.
Pair Corralation between Regions Financial and Kearny Financial
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.3 times less return on investment than Kearny Financial. But when comparing it to its historical volatility, Regions Financial is 1.59 times less risky than Kearny Financial. It trades about 0.17 of its potential returns per unit of risk. Kearny Financial Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 684.00 in Kearny Financial Corp on August 25, 2024 and sell it today you would earn a total of 143.00 from holding Kearny Financial Corp or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Kearny Financial Corp
Performance |
| Timeline |
| Regions Financial |
| Kearny Financial Corp |
Regions Financial and Kearny Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Kearny Financial
The main advantage of trading using opposite Regions Financial and Kearny Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Kearny 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 Kearny Financial will offset losses from the drop in Kearny Financial's long position.| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. PNC Financial Services |
| Kearny Financial vs. National Bank Holdings | Kearny Financial vs. Community West Bancshares | Kearny Financial vs. Financial Institutions | Kearny Financial vs. Heritage Financial |
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.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |