Correlation Between First Republic and Plumas Bancorp
Can any of the company-specific risk be diversified away by investing in both First Republic and Plumas 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 Plumas 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 Plumas Bancorp, you can compare the effects of market volatilities on First Republic and Plumas 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 Plumas Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Plumas Bancorp.
Diversification Opportunities for First Republic and Plumas Bancorp
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Plumas is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Plumas Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumas 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 Plumas Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumas Bancorp has no effect on the direction of First Republic i.e., First Republic and Plumas Bancorp go up and down completely randomly.
Pair Corralation between First Republic and Plumas Bancorp
If you would invest 3,275 in Plumas Bancorp on August 24, 2024 and sell it today you would earn a total of 1,418 from holding Plumas Bancorp or generate 43.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
First Republic Bank vs. Plumas Bancorp
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Plumas Bancorp |
First Republic and Plumas Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Plumas Bancorp
The main advantage of trading using opposite First Republic and Plumas Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Plumas 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 Plumas Bancorp will offset losses from the drop in Plumas Bancorp's long position.| First Republic vs. Paysafe | First Republic vs. Western Digital | First Republic vs. NETGEAR | First Republic vs. Canlan Ice Sports |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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