Correlation Between First Republic and Penns Woods
Can any of the company-specific risk be diversified away by investing in both First Republic and Penns Woods 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 Penns Woods 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 Penns Woods Bancorp, you can compare the effects of market volatilities on First Republic and Penns Woods 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 Penns Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Penns Woods.
Diversification Opportunities for First Republic and Penns Woods
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Penns is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Penns Woods Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penns Woods 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 Penns Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penns Woods Bancorp has no effect on the direction of First Republic i.e., First Republic and Penns Woods go up and down completely randomly.
Pair Corralation between First Republic and Penns Woods
If you would invest 2,146 in Penns Woods Bancorp on August 25, 2024 and sell it today you would earn a total of 895.00 from holding Penns Woods Bancorp or generate 41.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.44% |
| Values | Daily Returns |
First Republic Bank vs. Penns Woods Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Penns Woods Bancorp |
First Republic and Penns Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Penns Woods
The main advantage of trading using opposite First Republic and Penns Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Penns Woods 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 Penns Woods will offset losses from the drop in Penns Woods' long position.| First Republic vs. AmTrust Financial Services | First Republic vs. Chiba Bank Ltd | First Republic vs. SNDL Inc | First Republic vs. Glacier Bancorp |
| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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