Correlation Between First Republic and Northeast Bancorp
Can any of the company-specific risk be diversified away by investing in both First Republic and Northeast 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 Northeast 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 Northeast Bancorp, you can compare the effects of market volatilities on First Republic and Northeast 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 Northeast Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Northeast Bancorp.
Diversification Opportunities for First Republic and Northeast Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Northeast is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Northeast Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northeast 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 Northeast Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northeast Bancorp has no effect on the direction of First Republic i.e., First Republic and Northeast Bancorp go up and down completely randomly.
Pair Corralation between First Republic and Northeast Bancorp
If you would invest 5,360 in Northeast Bancorp on August 29, 2024 and sell it today you would earn a total of 4,600 from holding Northeast Bancorp or generate 85.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.48% |
| Values | Daily Returns |
First Republic Bank vs. Northeast Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northeast Bancorp |
First Republic and Northeast Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Northeast Bancorp
The main advantage of trading using opposite First Republic and Northeast Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Northeast 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 Northeast Bancorp will offset losses from the drop in Northeast Bancorp's long position.| First Republic vs. AMCON Distributing | First Republic vs. Radcom | First Republic vs. Marfrig Global Foods | First Republic vs. Kandi Technologies Group |
| Northeast Bancorp vs. Home Federal Bancorp | Northeast Bancorp vs. Mainstreet Bank | Northeast Bancorp vs. Investar Holding Corp | Northeast Bancorp vs. Magyar 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |