Correlation Between First Republic and Third Coast
Can any of the company-specific risk be diversified away by investing in both First Republic and Third Coast 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 Third Coast 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 Third Coast Bancshares, you can compare the effects of market volatilities on First Republic and Third Coast 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 Third Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Third Coast.
Diversification Opportunities for First Republic and Third Coast
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Third is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Third Coast Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Coast Bancshares 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 Third Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Coast Bancshares has no effect on the direction of First Republic i.e., First Republic and Third Coast go up and down completely randomly.
Pair Corralation between First Republic and Third Coast
If you would invest 1,817 in Third Coast Bancshares on August 29, 2024 and sell it today you would earn a total of 1,783 from holding Third Coast Bancshares or generate 98.13% 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. Third Coast Bancshares
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Third Coast Bancshares |
First Republic and Third Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Third Coast
The main advantage of trading using opposite First Republic and Third Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Third Coast 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 Third Coast will offset losses from the drop in Third Coast's long position.| First Republic vs. American Airlines Group | First Republic vs. Aegean Airlines SA | First Republic vs. BJs Restaurants | First Republic vs. Biglari Holdings |
| Third Coast vs. Byline Bancorp | Third Coast vs. Coastal Financial Corp | Third Coast vs. NBT Bancorp | Third Coast vs. Community West Bancshares |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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