Correlation Between First Republic and West Bancorporation
Can any of the company-specific risk be diversified away by investing in both First Republic and West Bancorporation 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 West Bancorporation 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 West Bancorporation, you can compare the effects of market volatilities on First Republic and West Bancorporation 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 West Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and West Bancorporation.
Diversification Opportunities for First Republic and West Bancorporation
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and West is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and West Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Bancorporation 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 West Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Bancorporation has no effect on the direction of First Republic i.e., First Republic and West Bancorporation go up and down completely randomly.
Pair Corralation between First Republic and West Bancorporation
If you would invest 1,648 in West Bancorporation on September 1, 2024 and sell it today you would earn a total of 739.00 from holding West Bancorporation or generate 44.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
First Republic Bank vs. West Bancorp.
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| West Bancorporation |
First Republic and West Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and West Bancorporation
The main advantage of trading using opposite First Republic and West Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, West Bancorporation 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 West Bancorporation will offset losses from the drop in West Bancorporation's long position.| First Republic vs. MACOM Technology Solutions | First Republic vs. Elmos Semiconductor SE | First Republic vs. NioCorp Developments Ltd | First Republic vs. Eldorado Gold Corp |
| West Bancorporation vs. MidWestOne Financial Group | West Bancorporation vs. Washington Trust Bancorp | West Bancorporation vs. Univest Pennsylvania | West Bancorporation vs. Sierra 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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