Correlation Between First Republic and BFC Capital
Can any of the company-specific risk be diversified away by investing in both First Republic and BFC Capital 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 BFC Capital 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 BFC Capital Trust, you can compare the effects of market volatilities on First Republic and BFC Capital 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 BFC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and BFC Capital.
Diversification Opportunities for First Republic and BFC Capital
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and BFC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and BFC Capital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFC Capital Trust 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 BFC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFC Capital Trust has no effect on the direction of First Republic i.e., First Republic and BFC Capital go up and down completely randomly.
Pair Corralation between First Republic and BFC Capital
If you would invest 2,522 in BFC Capital Trust on August 28, 2024 and sell it today you would earn a total of 48.00 from holding BFC Capital Trust or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
First Republic Bank vs. BFC Capital Trust
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BFC Capital Trust |
First Republic and BFC Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and BFC Capital
The main advantage of trading using opposite First Republic and BFC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, BFC Capital 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 BFC Capital will offset losses from the drop in BFC Capital's long position.| First Republic vs. BJs Restaurants | First Republic vs. MGIC Investment Corp | First Republic vs. GoHealth | First Republic vs. Old Republic International |
| BFC Capital vs. Popular Capital Trust | BFC Capital vs. CHS Inc CN | BFC Capital vs. Wintrust Financial Corp | BFC Capital vs. Auburn National Bancorporation |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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