Correlation Between First Republic and Banner
Can any of the company-specific risk be diversified away by investing in both First Republic and Banner 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 Banner 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 Banner, you can compare the effects of market volatilities on First Republic and Banner 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 Banner. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Banner.
Diversification Opportunities for First Republic and Banner
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Banner is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Banner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner 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 Banner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner has no effect on the direction of First Republic i.e., First Republic and Banner go up and down completely randomly.
Pair Corralation between First Republic and Banner
If you would invest 4,973 in Banner on September 3, 2024 and sell it today you would earn a total of 2,486 from holding Banner or generate 49.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.44% |
| Values | Daily Returns |
First Republic Bank vs. Banner
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Banner |
First Republic and Banner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Banner
The main advantage of trading using opposite First Republic and Banner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Banner 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 Banner will offset losses from the drop in Banner's long position.| First Republic vs. Omni Health | First Republic vs. Vodka Brands Corp | First Republic vs. BioNTech SE | First Republic vs. RadNet Inc |
| Banner vs. BancFirst | Banner vs. City Holding | Banner vs. Columbia Banking System | Banner vs. CVB Financial |
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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