Correlation Between First Horizon and First Republic
Can any of the company-specific risk be diversified away by investing in both First Horizon 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 First Horizon and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Horizon National and First Republic Bank, you can compare the effects of market volatilities on First Horizon 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 First Horizon with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Horizon and First Republic.
Diversification Opportunities for First Horizon and First Republic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and First is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National 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 First Horizon 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 Horizon National 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 First Horizon i.e., First Horizon and First Republic go up and down completely randomly.
Pair Corralation between First Horizon and First Republic
If you would invest 31.00 in First Republic Bank on September 25, 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 Against |
Strength | Very Weak |
Accuracy | 5.0% |
Values | Daily Returns |
First Horizon National vs. First Republic Bank
Performance |
Timeline |
First Horizon National |
First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Horizon and First Republic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Horizon and First Republic
The main advantage of trading using opposite First Horizon and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Horizon 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.First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
First Republic vs. Logan Ridge Finance | First Republic vs. Kinsale Capital Group | First Republic vs. Ameriprise Financial | First Republic vs. Stepstone Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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