Correlation Between First Republic and Southern Copper
Can any of the company-specific risk be diversified away by investing in both First Republic and Southern Copper 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 Southern Copper 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 Southern Copper, you can compare the effects of market volatilities on First Republic and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Southern Copper.
Diversification Opportunities for First Republic and Southern Copper
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Southern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of First Republic i.e., First Republic and Southern Copper go up and down completely randomly.
Pair Corralation between First Republic and Southern Copper
If you would invest 202,087 in Southern Copper on August 31, 2024 and sell it today you would earn a total of 8,103 from holding Southern Copper or generate 4.01% 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. Southern Copper
Performance |
| Timeline |
| First Republic Bank |
| Southern Copper |
First Republic and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Southern Copper
The main advantage of trading using opposite First Republic and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| First Republic vs. Grupo Financiero Banorte | First Republic vs. Grupo Financiero Inbursa | First Republic vs. Banco del Bajo |
| Southern Copper vs. Deutsche Bank Aktiengesellschaft | Southern Copper vs. FIBRA Storage | Southern Copper vs. McEwen Mining | Southern Copper vs. Ross Stores |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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