Correlation Between Heritage Commerce and Kearny Financial
Can any of the company-specific risk be diversified away by investing in both Heritage Commerce 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 Heritage Commerce and Kearny Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Commerce Corp and Kearny Financial Corp, you can compare the effects of market volatilities on Heritage Commerce 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 Heritage Commerce with a short position of Kearny Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Commerce and Kearny Financial.
Diversification Opportunities for Heritage Commerce and Kearny Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heritage and Kearny is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Commerce Corp 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 Heritage Commerce 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 Heritage Commerce Corp 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 Heritage Commerce i.e., Heritage Commerce and Kearny Financial go up and down completely randomly.
Pair Corralation between Heritage Commerce and Kearny Financial
Given the investment horizon of 90 days Heritage Commerce Corp is expected to generate 0.53 times more return on investment than Kearny Financial. However, Heritage Commerce Corp is 1.88 times less risky than Kearny Financial. It trades about 0.02 of its potential returns per unit of risk. Kearny Financial Corp is currently generating about -0.06 per unit of risk. If you would invest 825.00 in Heritage Commerce Corp on February 8, 2024 and sell it today you would earn a total of 5.00 from holding Heritage Commerce Corp or generate 0.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Heritage Commerce Corp vs. Kearny Financial Corp
Performance |
Timeline |
Heritage Commerce Corp |
Kearny Financial Corp |
Heritage Commerce and Kearny Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heritage Commerce and Kearny Financial
The main advantage of trading using opposite Heritage Commerce and Kearny Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Commerce 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.Heritage Commerce vs. Commerzbank AG PK | Heritage Commerce vs. ConnectOne Bancorp | Heritage Commerce vs. Lake Shore Bancorp | Heritage Commerce vs. Community West Bancshares |
Kearny Financial vs. Commerzbank AG PK | Kearny Financial vs. ConnectOne Bancorp | Kearny Financial vs. Lake Shore Bancorp | Kearny Financial vs. Community West Bancshares |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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