Correlation Between Zions Bancorporation and FIRST REP

Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation 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 Zions Bancorporation and FIRST REP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zions Bancorporation and FIRST REP BK, you can compare the effects of market volatilities on Zions Bancorporation 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 Zions Bancorporation with a short position of FIRST REP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and FIRST REP.

Diversification Opportunities for Zions Bancorporation and FIRST REP

-0.02

Correlation Coefficient

Zions Bancorporation  FIRST REP

Good diversification

The 3 months correlation between Zions and FIRST is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zions 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 Zions Bancorporation 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 Zions Bancorporation 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 Zions Bancorporation i.e., Zions Bancorporation and FIRST REP go up and down completely randomly.

Pair Corralation between Zions Bancorporation and FIRST REP

If you would invest  33.00  in FIRST REP BK on January 20, 2024 and sell it today you would earn a total of  0.00  from holding FIRST REP BK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Zions Bancorp.  vs.  FIRST REP BK

Zions Bancorporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zions Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zions Bancorporation is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

FIRST REP BK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIRST REP BK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FIRST REP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zions Bancorporation and FIRST REP

The main advantage of trading using opposite Zions Bancorporation and FIRST REP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation 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.

The idea behind Zions Bancorporation and FIRST REP BK 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.