Correlation Between First Republic and CF Financial
Can any of the company-specific risk be diversified away by investing in both First Republic and CF 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 CF 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 CF Financial, you can compare the effects of market volatilities on First Republic and CF 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 CF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and CF Financial.
Diversification Opportunities for First Republic and CF Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and CFFI is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and CF Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF 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 CF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Financial has no effect on the direction of First Republic i.e., First Republic and CF Financial go up and down completely randomly.
Pair Corralation between First Republic and CF Financial
If you would invest 6,178 in CF Financial on August 28, 2024 and sell it today you would earn a total of 1,715 from holding CF Financial or generate 27.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Republic Bank vs. CF Financial
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CF Financial |
First Republic and CF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and CF Financial
The main advantage of trading using opposite First Republic and CF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, CF 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 CF Financial will offset losses from the drop in CF Financial's long position.| First Republic vs. Japan Tobacco ADR | First Republic vs. Compania Cervecerias Unidas | First Republic vs. Udemy Inc | First Republic vs. WEBTOON Entertainment Common |
| CF Financial vs. Fifth Third Bancorp | CF Financial vs. Huntington Bancshares Incorporated | CF Financial vs. MT 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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