Correlation Between First Republic and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both First Republic and Dollar Tree 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 Dollar Tree 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 Dollar Tree, you can compare the effects of market volatilities on First Republic and Dollar Tree 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 Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Dollar Tree.
Diversification Opportunities for First Republic and Dollar Tree
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Dollar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree 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 Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of First Republic i.e., First Republic and Dollar Tree go up and down completely randomly.
Pair Corralation between First Republic and Dollar Tree
If you would invest 6,095 in First Republic Bank on October 3, 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 | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Republic Bank vs. Dollar Tree
Performance |
Timeline |
First Republic Bank |
Dollar Tree |
First Republic and Dollar Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Republic and Dollar Tree
The main advantage of trading using opposite First Republic and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Dollar Tree 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 Dollar Tree will offset losses from the drop in Dollar Tree's long position.First Republic vs. Capital One Financial | First Republic vs. Ameriprise Financial | First Republic vs. Lloyds Banking Group | First Republic vs. Hoteles City Express |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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