Correlation Between Republic Bancorp and Ams AG

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

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

Diversification Opportunities for Republic Bancorp and Ams AG

-0.87

Correlation Coefficient

Republic Bancorp  Ams AG

Pay attention - limited upside

The 3 months correlation between Republic and Ams is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG and Republic 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 Republic Bancorp are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ams AG has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and Ams AG go up and down completely randomly.

Pair Corralation between Republic Bancorp and Ams AG

Assuming the 90 days horizon Republic Bancorp is expected to under-perform the Ams AG. But the stock apears to be less risky and, when comparing its historical volatility, Republic Bancorp is 6.8 times less risky than Ams AG. The stock trades about -0.21 of its potential returns per unit of risk. The ams AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  336.00  in ams AG on September 23, 2024 and sell it today you would earn a total of  22.00  from holding ams AG or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Republic Bancorp  vs.  ams AG

Republic Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Republic Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Republic Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Republic Bancorp and Ams AG

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

The idea behind Republic Bancorp and ams AG 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..