Correlation Between First Republic and First United
Can any of the company-specific risk be diversified away by investing in both First Republic and First United 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 First United 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 First United, you can compare the effects of market volatilities on First Republic and First United 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 First United. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and First United.
Diversification Opportunities for First Republic and First United
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United 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 First United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of First Republic i.e., First Republic and First United go up and down completely randomly.
Pair Corralation between First Republic and First United
If you would invest 1,969 in First United on August 25, 2024 and sell it today you would earn a total of 1,528 from holding First United or generate 77.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
First Republic Bank vs. First United
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First United |
First Republic and First United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and First United
The main advantage of trading using opposite First Republic and First United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, First United 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 First United will offset losses from the drop in First United's long position.| First Republic vs. Tower Semiconductor | First Republic vs. Nextplat Corp | First Republic vs. Sphere Entertainment Co | First Republic vs. Freedom Internet Group |
| First United vs. First Community | First United vs. Greene County Bancorp | First United vs. Community West Bancshares | First United vs. Affinity Bancshares |
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 CEOs Directory module to screen CEOs from public companies around the world.
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