Correlation Between ECB Bancorp and First Republic
Can any of the company-specific risk be diversified away by investing in both ECB Bancorp and First Republic 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 ECB Bancorp and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECB Bancorp and First Republic Bank, you can compare the effects of market volatilities on ECB Bancorp and First Republic 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 ECB Bancorp with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECB Bancorp and First Republic.
Diversification Opportunities for ECB Bancorp and First Republic
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECB and First is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ECB Bancorp and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank and ECB Bancorp 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 ECB Bancorp are associated (or correlated) with First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of ECB Bancorp i.e., ECB Bancorp and First Republic go up and down completely randomly.
Pair Corralation between ECB Bancorp and First Republic
If you would invest 1,235 in ECB Bancorp on September 1, 2024 and sell it today you would earn a total of 264.00 from holding ECB Bancorp or generate 21.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
ECB Bancorp vs. First Republic Bank
Performance |
| Timeline |
| ECB Bancorp |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ECB Bancorp and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECB Bancorp and First Republic
The main advantage of trading using opposite ECB Bancorp and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECB Bancorp position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| ECB Bancorp vs. Affinity Bancshares | ECB Bancorp vs. Southern California Bancorp | ECB Bancorp vs. Auburn National Bancorporation | ECB Bancorp vs. BayCom Corp |
| First Republic vs. CapitaLand Investment Limited | First Republic vs. MGIC Investment Corp | First Republic vs. SunLink Health Systems | First Republic vs. Simon Property Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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