Correlation Between First Republic and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both First Republic and Eagle Bancorp 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 Eagle Bancorp 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 Eagle Bancorp, you can compare the effects of market volatilities on First Republic and Eagle Bancorp 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 Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Eagle Bancorp.
Diversification Opportunities for First Republic and Eagle Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Eagle is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp 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 Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp has no effect on the direction of First Republic i.e., First Republic and Eagle Bancorp go up and down completely randomly.
Pair Corralation between First Republic and Eagle Bancorp
Assuming the 90 days horizon First Republic Bank is expected to under-perform the Eagle Bancorp. In addition to that, First Republic is 7.3 times more volatile than Eagle Bancorp. It trades about -0.03 of its total potential returns per unit of risk. Eagle Bancorp is currently generating about 0.0 per unit of volatility. If you would invest 3,934 in Eagle Bancorp on August 27, 2024 and sell it today you would lose (993.00) from holding Eagle Bancorp or give up 25.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.65% |
| Values | Daily Returns |
First Republic Bank vs. Eagle Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eagle Bancorp |
First Republic and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Eagle Bancorp
The main advantage of trading using opposite First Republic and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Eagle Bancorp 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 Eagle Bancorp will offset losses from the drop in Eagle Bancorp's long position.| First Republic vs. Abcellera Biologics | First Republic vs. EvoAir Holdings | First Republic vs. Tarsus Pharmaceuticals | First Republic vs. AerSale Corp |
| Eagle Bancorp vs. Fifth Third Bancorp | Eagle Bancorp vs. Zions Bancorporation | Eagle Bancorp vs. Huntington Bancshares Incorporated | Eagle Bancorp vs. PNC Financial Services |
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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