Correlation Between First Republic and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both First Republic and Heartland Financial 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 Heartland Financial 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 Heartland Financial USA, you can compare the effects of market volatilities on First Republic and Heartland Financial 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Heartland Financial.
Diversification Opportunities for First Republic and Heartland Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Heartland is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of First Republic i.e., First Republic and Heartland Financial go up and down completely randomly.
Pair Corralation between First Republic and Heartland Financial
If you would invest 2,512 in Heartland Financial USA on August 24, 2024 and sell it today you would earn a total of 20.00 from holding Heartland Financial USA or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Republic Bank vs. Heartland Financial USA
Performance |
| Timeline |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Heartland Financial USA |
First Republic and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Heartland Financial
The main advantage of trading using opposite First Republic and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Heartland Financial 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.| First Republic vs. Sapiens International | First Republic vs. Western Digital | First Republic vs. Stratasys | First Republic vs. Qualys Inc |
| Heartland Financial vs. Capital One Financial | Heartland Financial vs. Capital One Financial | Heartland Financial vs. Bank of America | Heartland Financial vs. KeyCorp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |