Correlation Between Rocky Brands and First Republic
Can any of the company-specific risk be diversified away by investing in both Rocky Brands 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 Rocky Brands and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and First Republic Bank, you can compare the effects of market volatilities on Rocky Brands 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 Rocky Brands with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and First Republic.
Diversification Opportunities for Rocky Brands and First Republic
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rocky and First is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands 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 Rocky Brands 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 Rocky Brands 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 Rocky Brands i.e., Rocky Brands and First Republic go up and down completely randomly.
Pair Corralation between Rocky Brands and First Republic
Given the investment horizon of 90 days Rocky Brands is expected to generate 0.15 times more return on investment than First Republic. However, Rocky Brands is 6.46 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 -0.1 per unit of risk. If you would invest 2,744 in Rocky Brands on November 2, 2024 and sell it today you would lose (240.00) from holding Rocky Brands or give up 8.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.27% |
| Values | Daily Returns |
Rocky Brands vs. First Republic Bank
Performance |
| Timeline |
| Rocky Brands |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rocky Brands and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and First Republic
The main advantage of trading using opposite Rocky Brands and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands 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.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
| First Republic vs. MYT Netherlands Parent | First Republic vs. Cheche Group Class | First Republic vs. Ziff Davis | First Republic vs. CDW Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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