Correlation Between First Republic and Heritage Financial
Can any of the company-specific risk be diversified away by investing in both First Republic and Heritage 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 Heritage 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 Heritage Financial, you can compare the effects of market volatilities on First Republic and Heritage 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 Heritage Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Heritage Financial.
Diversification Opportunities for First Republic and Heritage Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Heritage is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Heritage Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Financial 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 Heritage Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Financial has no effect on the direction of First Republic i.e., First Republic and Heritage Financial go up and down completely randomly.
Pair Corralation between First Republic and Heritage Financial
If you would invest 2,372 in Heritage Financial on October 20, 2024 and sell it today you would earn a total of 83.00 from holding Heritage Financial or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
First Republic Bank vs. Heritage Financial
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Heritage Financial |
First Republic and Heritage Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Heritage Financial
The main advantage of trading using opposite First Republic and Heritage Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Heritage 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 Heritage Financial will offset losses from the drop in Heritage Financial's long position.| First Republic vs. Envista Holdings Corp | First Republic vs. Victorias Secret Co | First Republic vs. Nyxoah | First Republic vs. Cintas |
| Heritage Financial vs. Heritage Commerce Corp | Heritage Financial vs. Horizon Bancorp | Heritage Financial vs. Heartland Financial USA | Heritage Financial vs. Independent Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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