Correlation Between IF Bancorp and Republic Bancorp
Can any of the company-specific risk be diversified away by investing in both IF Bancorp and Republic 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 IF Bancorp and Republic Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IF Bancorp and Republic Bancorp, you can compare the effects of market volatilities on IF Bancorp and Republic 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 IF Bancorp with a short position of Republic Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of IF Bancorp and Republic Bancorp.
Diversification Opportunities for IF Bancorp and Republic Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IROQ and Republic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding IF Bancorp and Republic Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic Bancorp and IF 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 IF Bancorp are associated (or correlated) with Republic Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Bancorp has no effect on the direction of IF Bancorp i.e., IF Bancorp and Republic Bancorp go up and down completely randomly.
Pair Corralation between IF Bancorp and Republic Bancorp
Given the investment horizon of 90 days IF Bancorp is expected to generate 0.85 times more return on investment than Republic Bancorp. However, IF Bancorp is 1.18 times less risky than Republic Bancorp. It trades about 0.07 of its potential returns per unit of risk. Republic Bancorp is currently generating about 0.05 per unit of risk. If you would invest 1,756 in IF Bancorp on September 20, 2024 and sell it today you would earn a total of 526.00 from holding IF Bancorp or generate 29.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 91.97% |
Values | Daily Returns |
IF Bancorp vs. Republic Bancorp
Performance |
Timeline |
IF Bancorp |
Republic Bancorp |
IF Bancorp and Republic Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IF Bancorp and Republic Bancorp
The main advantage of trading using opposite IF Bancorp and Republic Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IF Bancorp position performs unexpectedly, Republic 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 Republic Bancorp will offset losses from the drop in Republic Bancorp's long position.IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal Bancorp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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