Correlation Between Kearny Financial and Chemung Financial

Can any of the company-specific risk be diversified away by investing in both Kearny Financial and Chemung 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 Kearny Financial and Chemung Financial 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 Chemung Financial Corp, you can compare the effects of market volatilities on Kearny Financial and Chemung 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 Kearny Financial with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kearny Financial and Chemung Financial.

Diversification Opportunities for Kearny Financial and Chemung Financial

0.87

Correlation Coefficient

Kearny Financial  Chemung Financial

Very poor diversification

The 3 months correlation between Kearny and Chemung is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kearny Financial Corp and Chemung Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemung Financial Corp 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 Chemung Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemung Financial Corp has no effect on the direction of Kearny Financial i.e., Kearny Financial and Chemung Financial go up and down completely randomly.

Pair Corralation between Kearny Financial and Chemung Financial

Given the investment horizon of 90 days Kearny Financial is expected to generate 1.46 times less return on investment than Chemung Financial. In addition to that, Kearny Financial is 1.92 times more volatile than Chemung Financial Corp. It trades about 0.02 of its total potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.07 per unit of volatility. If you would invest  4,721  in Chemung Financial Corp on September 30, 2024 and sell it today you would earn a total of  219.00  from holding Chemung Financial Corp or generate 4.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Kearny Financial Corp  vs.  Chemung Financial Corp

Kearny Financial Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kearny Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Kearny Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chemung Financial Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chemung Financial Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Chemung Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kearny Financial and Chemung Financial

The main advantage of trading using opposite Kearny Financial and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kearny Financial position performs unexpectedly, Chemung 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 Chemung Financial will offset losses from the drop in Chemung Financial's long position.

The idea behind Kearny Financial Corp and Chemung Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.