Correlation Between First Republic and FB Financial
Can any of the company-specific risk be diversified away by investing in both First Republic and FB Financial 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 FB Financial 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 FB Financial Corp, you can compare the effects of market volatilities on First Republic and FB Financial 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 FB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and FB Financial.
Diversification Opportunities for First Republic and FB Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and FBK is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and FB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FB Financial Corp 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 FB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FB Financial Corp has no effect on the direction of First Republic i.e., First Republic and FB Financial go up and down completely randomly.
Pair Corralation between First Republic and FB Financial
If you would invest 5,054 in FB Financial Corp on November 3, 2024 and sell it today you would earn a total of 227.00 from holding FB Financial Corp or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Republic Bank vs. FB Financial Corp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FB Financial Corp |
First Republic and FB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and FB Financial
The main advantage of trading using opposite First Republic and FB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, FB Financial 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 FB Financial will offset losses from the drop in FB Financial's long position.| First Republic vs. Brandywine Realty Trust | First Republic vs. Willamette Valley Vineyards | First Republic vs. Naked Wines plc | First Republic vs. Diamond Estates Wines |
| FB Financial vs. Home Bancorp | FB Financial vs. First Business Financial | FB Financial vs. LINKBANCORP | FB Financial vs. Great Southern Bancorp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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