Correlation Between United Guardian and First Republic
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and First Republic Bank, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and First Republic.
Diversification Opportunities for United Guardian and First Republic
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and First is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian 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 United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and First Republic go up and down completely randomly.
Pair Corralation between United Guardian and First Republic
If you would invest 0.02 in First Republic Bank on September 4, 2024 and sell it today you would earn a total of 0.00 from holding First Republic Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
United Guardian vs. First Republic Bank
Performance |
| Timeline |
| United Guardian |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Guardian and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and First Republic
The main advantage of trading using opposite United Guardian and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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