Correlation Between First Republic and US Bancorp
Can any of the company-specific risk be diversified away by investing in both First Republic and US Bancorp 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 US Bancorp 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 US Bancorp, you can compare the effects of market volatilities on First Republic and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and US Bancorp.
Diversification Opportunities for First Republic and US Bancorp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and USB is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of First Republic i.e., First Republic and US Bancorp go up and down completely randomly.
Pair Corralation between First Republic and US Bancorp
If you would invest 4,786 in US Bancorp on November 2, 2024 and sell it today you would earn a total of 14.00 from holding US Bancorp or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
First Republic Bank vs. US Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Bancorp |
First Republic and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and US Bancorp
The main advantage of trading using opposite First Republic and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| First Republic vs. LAir Liquide SA | First Republic vs. Wizz Air Holdings | First Republic vs. Alaska Air Group | First Republic vs. Highway Holdings Limited |
| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
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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