Correlation Between First Republic and Live Oak
Can any of the company-specific risk be diversified away by investing in both First Republic and Live Oak 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 Live Oak 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 Live Oak Bancshares, you can compare the effects of market volatilities on First Republic and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Live Oak.
Diversification Opportunities for First Republic and Live Oak
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Live is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Live Oak Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Bancshares 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Bancshares has no effect on the direction of First Republic i.e., First Republic and Live Oak go up and down completely randomly.
Pair Corralation between First Republic and Live Oak
If you would invest 4,083 in Live Oak Bancshares on September 4, 2024 and sell it today you would earn a total of 624.00 from holding Live Oak Bancshares or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Republic Bank vs. Live Oak Bancshares
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Live Oak Bancshares |
First Republic and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Live Oak
The main advantage of trading using opposite First Republic and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| First Republic vs. Lindblad Expeditions Holdings | First Republic vs. Grocery Outlet Holding | First Republic vs. Meiwu Technology Co | First Republic vs. Skillful Craftsman Education |
| Live Oak vs. International Bancshares | Live Oak vs. Finward Bancorp | Live Oak vs. Aquagold International | Live Oak vs. Thrivent High Yield |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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