Correlation Between First Republic and OptimumBank Holdings
Can any of the company-specific risk be diversified away by investing in both First Republic and OptimumBank Holdings 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 OptimumBank Holdings 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 OptimumBank Holdings, you can compare the effects of market volatilities on First Republic and OptimumBank Holdings 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 OptimumBank Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and OptimumBank Holdings.
Diversification Opportunities for First Republic and OptimumBank Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and OptimumBank is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and OptimumBank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptimumBank Holdings 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 OptimumBank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptimumBank Holdings has no effect on the direction of First Republic i.e., First Republic and OptimumBank Holdings go up and down completely randomly.
Pair Corralation between First Republic and OptimumBank Holdings
If you would invest 0.02 in First Republic Bank on September 13, 2024 and sell it today you would earn a total of 0.00 from holding First Republic Bank or generate 0.0% 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. OptimumBank Holdings
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| OptimumBank Holdings |
First Republic and OptimumBank Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and OptimumBank Holdings
The main advantage of trading using opposite First Republic and OptimumBank Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, OptimumBank Holdings 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 OptimumBank Holdings will offset losses from the drop in OptimumBank Holdings' long position.| First Republic vs. SunOpta | First Republic vs. Western Acquisition Ventures | First Republic vs. Forsys Metals Corp | First Republic vs. BBB Foods |
| OptimumBank Holdings vs. First National Bank | OptimumBank Holdings vs. TrustCo Bank Corp | OptimumBank Holdings vs. Inter Co Class | OptimumBank Holdings vs. Rhinebeck 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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