Correlation Between FirstCash and RBB Bancorp

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

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

Diversification Opportunities for FirstCash and RBB Bancorp

0.2

Correlation Coefficient

FirstCash  RBB Bancorp

Modest diversification

The 3 months correlation between FirstCash and RBB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and RBB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Bancorp and FirstCash 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 FirstCash are associated (or correlated) with RBB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Bancorp has no effect on the direction of FirstCash i.e., FirstCash and RBB Bancorp go up and down completely randomly.

Pair Corralation between FirstCash and RBB Bancorp

Given the investment horizon of 90 days FirstCash is expected to generate 2.22 times less return on investment than RBB Bancorp. But when comparing it to its historical volatility, FirstCash is 1.06 times less risky than RBB Bancorp. It trades about 0.04 of its potential returns per unit of risk. RBB Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,680  in RBB Bancorp on May 13, 2025 and sell it today you would earn a total of  163.00  from holding RBB Bancorp or generate 9.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

FirstCash  vs.  RBB Bancorp

FirstCash

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in FirstCash are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, FirstCash is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

RBB Bancorp

Risk-Adjusted Performance

Mild

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

Pair Trading with FirstCash and RBB Bancorp

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

The idea behind FirstCash and RBB Bancorp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.