Correlation Between Postal Realty and First Republic
Can any of the company-specific risk be diversified away by investing in both Postal Realty and First Republic 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 Postal Realty and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and First Republic Bank, you can compare the effects of market volatilities on Postal Realty and First Republic 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 Postal Realty with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and First Republic.
Diversification Opportunities for Postal Realty and First Republic
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Postal and First is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank and Postal Realty 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 Postal Realty Trust are associated (or correlated) with First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Postal Realty i.e., Postal Realty and First Republic go up and down completely randomly.
Pair Corralation between Postal Realty and First Republic
Given the investment horizon of 90 days Postal Realty Trust is expected to generate 0.04 times more return on investment than First Republic. However, Postal Realty Trust is 23.1 times less risky than First Republic. It trades about 0.02 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.05 per unit of risk. If you would invest 1,315 in Postal Realty Trust on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Postal Realty Trust or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.58% |
| Values | Daily Returns |
Postal Realty Trust vs. First Republic Bank
Performance |
| Timeline |
| Postal Realty Trust |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Postal Realty and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and First Republic
The main advantage of trading using opposite Postal Realty and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Postal Realty vs. Office Properties Income | Postal Realty vs. SL Green Realty | Postal Realty vs. Highwoods Properties | Postal Realty vs. Equity Commonwealth |
| First Republic vs. Sun Country Airlines | First Republic vs. BRP Inc | First Republic vs. Fossil Group | First Republic vs. United Guardian |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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