Correlation Between ST Bancorp and FIRST REP
Can any of the company-specific risk be diversified away by investing in both ST Bancorp and FIRST REP 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 ST Bancorp and FIRST REP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ST Bancorp and FIRST REP BK, you can compare the effects of market volatilities on ST Bancorp and FIRST REP 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 ST Bancorp with a short position of FIRST REP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ST Bancorp and FIRST REP.
Diversification Opportunities for ST Bancorp and FIRST REP
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STBA and FIRST is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ST Bancorp and FIRST REP BK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST REP BK and ST Bancorp 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 ST Bancorp are associated (or correlated) with FIRST REP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST REP BK has no effect on the direction of ST Bancorp i.e., ST Bancorp and FIRST REP go up and down completely randomly.
Pair Corralation between ST Bancorp and FIRST REP
If you would invest 3,074 in ST Bancorp on January 25, 2024 and sell it today you would earn a total of 53.00 from holding ST Bancorp or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
ST Bancorp vs. FIRST REP BK
Performance |
| Timeline |
| ST Bancorp |
| FIRST REP BK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ST Bancorp and FIRST REP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ST Bancorp and FIRST REP
The main advantage of trading using opposite ST Bancorp and FIRST REP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ST Bancorp position performs unexpectedly, FIRST REP 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 REP will offset losses from the drop in FIRST REP's long position.| ST Bancorp vs. CrossFirst Bankshares | ST Bancorp vs. Enterprise Financial Services | ST Bancorp vs. The First Bancshares | ST Bancorp vs. First Bancorp |
| FIRST REP vs. Zions Bancorporation | FIRST REP vs. KeyCorp | FIRST REP vs. Comerica | FIRST REP vs. First Horizon National |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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