Correlation Between Republic Bancorp and Buyer Group

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

By analyzing existing cross correlation between Republic Bancorp and Buyer Group International, you can compare the effects of market volatilities on Republic Bancorp and Buyer Group 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 Buyer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and Buyer Group.

Diversification Opportunities for Republic Bancorp and Buyer Group

-0.09

Correlation Coefficient

Republic Bancorp  Buyer Group

Good diversification

The 3 months correlation between Republic and Buyer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and Buyer Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyer Group International 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 Buyer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyer Group International has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and Buyer Group go up and down completely randomly.

Pair Corralation between Republic Bancorp and Buyer Group

Assuming the 90 days horizon Republic Bancorp is expected to under-perform the Buyer Group. But the stock apears to be less risky and, when comparing its historical volatility, Republic Bancorp is 4.52 times less risky than Buyer Group. The stock trades about -0.5 of its potential returns per unit of risk. The Buyer Group International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Buyer Group International on October 15, 2024 and sell it today you would earn a total of  0.00  from holding Buyer Group International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Republic Bancorp  vs.  Buyer Group International

Republic Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Republic Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Republic Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Buyer Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buyer Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, Buyer Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Republic Bancorp and Buyer Group

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

The idea behind Republic Bancorp and Buyer Group International 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.