Correlation Between First Republic and First State
Can any of the company-specific risk be diversified away by investing in both First Republic and First State 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 First State 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 First State Financial, you can compare the effects of market volatilities on First Republic and First State 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 First State. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and First State.
Diversification Opportunities for First Republic and First State
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and First State Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First State 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 First State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First State Financial has no effect on the direction of First Republic i.e., First Republic and First State go up and down completely randomly.
Pair Corralation between First Republic and First State
If you would invest 4.47 in First State Financial on August 31, 2024 and sell it today you would earn a total of 0.00 from holding First State Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Republic Bank vs. First State Financial
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Republic and First State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and First State
The main advantage of trading using opposite First Republic and First State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, First State 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 First State will offset losses from the drop in First State's long position.| First Republic vs. Afya | First Republic vs. Ihuman Inc | First Republic vs. Celsius Holdings | First Republic vs. Beyond Meat |
| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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