Correlation Between First Republic and Signature Bank
Can any of the company-specific risk be diversified away by investing in both First Republic and Signature Bank 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 Signature Bank 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 Signature Bank, you can compare the effects of market volatilities on First Republic and Signature Bank 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 Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Signature Bank.
Diversification Opportunities for First Republic and Signature Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Signature is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank 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 Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of First Republic i.e., First Republic and Signature Bank go up and down completely randomly.
Pair Corralation between First Republic and Signature Bank
If you would invest 1.70 in Signature Bank on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Signature Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Republic Bank vs. Signature Bank
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Republic and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Signature Bank
The main advantage of trading using opposite First Republic and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank's long position.| First Republic vs. Meiwu Technology Co | First Republic vs. AMCON Distributing | First Republic vs. Freedom Internet Group | First Republic vs. NETGEAR |
| Signature Bank vs. PennantPark Floating Rate | Signature Bank vs. GMS Inc | Signature Bank vs. Stepstone Group | Signature Bank vs. Griffon |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |