Correlation Between First Republic and SmartFinancial,

Can any of the company-specific risk be diversified away by investing in both First Republic and SmartFinancial, 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 SmartFinancial, 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 SmartFinancial,, you can compare the effects of market volatilities on First Republic and SmartFinancial, 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 SmartFinancial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and SmartFinancial,.

Diversification Opportunities for First Republic and SmartFinancial,

-0.57

Correlation Coefficient

First Republic  SmartFinancial,

Excellent diversification

The 3 months correlation between First and SmartFinancial, is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and SmartFinancial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartFinancial, 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 SmartFinancial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartFinancial, has no effect on the direction of First Republic i.e., First Republic and SmartFinancial, go up and down completely randomly.

Pair Corralation between First Republic and SmartFinancial,

If you would invest  2,858  in SmartFinancial, on September 27, 2024 and sell it today you would earn a total of  286.00  from holding SmartFinancial, or generate 10.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

First Republic Bank  vs.  SmartFinancial,

First Republic Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Republic Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, First Republic is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

SmartFinancial,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SmartFinancial, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SmartFinancial, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with First Republic and SmartFinancial,

The main advantage of trading using opposite First Republic and SmartFinancial, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, SmartFinancial, 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 SmartFinancial, will offset losses from the drop in SmartFinancial,'s long position.

The idea behind First Republic Bank and SmartFinancial, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.