Correlation Between Kearny Financial and Walker Dunlop

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

Diversification Opportunities for Kearny Financial and Walker Dunlop

-0.03

Correlation Coefficient

Kearny Financial  Walker Dunlop

Good diversification

The 3 months correlation between Kearny and Walker is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kearny Financial Corp and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop 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 Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Kearny Financial i.e., Kearny Financial and Walker Dunlop go up and down completely randomly.

Pair Corralation between Kearny Financial and Walker Dunlop

Given the investment horizon of 90 days Kearny Financial is expected to generate 28.0 times less return on investment than Walker Dunlop. In addition to that, Kearny Financial is 1.21 times more volatile than Walker Dunlop. It trades about 0.0 of its total potential returns per unit of risk. Walker Dunlop is currently generating about 0.04 per unit of volatility. If you would invest  7,413  in Walker Dunlop on October 5, 2024 and sell it today you would earn a total of  2,131  from holding Walker Dunlop or generate 28.75% return on investment over 90 days.

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

Kearny Financial Corp  vs.  Walker Dunlop

Kearny Financial Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kearny Financial Corp are ranked lower than 3 (%) 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 February 2025.

Walker Dunlop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kearny Financial and Walker Dunlop

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

The idea behind Kearny Financial Corp and Walker Dunlop 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.