Correlation Between First Republic and 3M
Can any of the company-specific risk be diversified away by investing in both First Republic and 3M 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 First Republic and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Republic Bank and 3M Company, you can compare the effects of market volatilities on First Republic and 3M 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 First Republic with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and 3M.
Diversification Opportunities for First Republic and 3M
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and 3M is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and First Republic 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 First Republic Bank are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of First Republic i.e., First Republic and 3M go up and down completely randomly.
Pair Corralation between First Republic and 3M
If you would invest 6,095 in First Republic Bank on September 23, 2024 and sell it today you would earn a total of 0.00 from holding First Republic Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Republic Bank vs. 3M Company
Performance |
| Timeline |
| First Republic Bank |
| 3M Company |
First Republic and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and 3M
The main advantage of trading using opposite First Republic and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| First Republic vs. First Majestic Silver | First Republic vs. Delta Air Lines | First Republic vs. GMxico Transportes SAB | First Republic vs. UnitedHealth Group Incorporated |
| 3M vs. Genworth Financial | 3M vs. DXC Technology | 3M vs. First Republic Bank | 3M vs. Verizon Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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