Correlation Between First Republic and Pathfinder Bancorp
Can any of the company-specific risk be diversified away by investing in both First Republic and Pathfinder Bancorp 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 Pathfinder Bancorp 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 Pathfinder Bancorp, you can compare the effects of market volatilities on First Republic and Pathfinder Bancorp 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 Pathfinder Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Pathfinder Bancorp.
Diversification Opportunities for First Republic and Pathfinder Bancorp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Pathfinder is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder 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 Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of First Republic i.e., First Republic and Pathfinder Bancorp go up and down completely randomly.
Pair Corralation between First Republic and Pathfinder Bancorp
Assuming the 90 days horizon First Republic Bank is expected to generate 14.61 times more return on investment than Pathfinder Bancorp. However, First Republic is 14.61 times more volatile than Pathfinder Bancorp. It trades about 0.12 of its potential returns per unit of risk. Pathfinder Bancorp is currently generating about 0.04 per unit of risk. If you would invest 0.50 in First Republic Bank on August 31, 2024 and sell it today you would lose (0.48) from holding First Republic Bank or give up 96.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.45% |
| Values | Daily Returns |
First Republic Bank vs. Pathfinder Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pathfinder Bancorp |
First Republic and Pathfinder Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Pathfinder Bancorp
The main advantage of trading using opposite First Republic and Pathfinder Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Pathfinder Bancorp 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 Pathfinder Bancorp will offset losses from the drop in Pathfinder Bancorp's long position.| First Republic vs. Afya | First Republic vs. Ihuman Inc | First Republic vs. Celsius Holdings | First Republic vs. Beyond Meat |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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