Correlation Between Republic Bancorp and Crayon Group

Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and Crayon 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 Crayon 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 Crayon Group Holding, you can compare the effects of market volatilities on Republic Bancorp and Crayon 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 Crayon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and Crayon Group.

Diversification Opportunities for Republic Bancorp and Crayon Group

-0.8

Correlation Coefficient

Republic Bancorp  Crayon Group

Pay attention - limited upside

The 3 months correlation between Republic and Crayon is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and Crayon Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crayon Group Holding 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 Crayon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crayon Group Holding has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and Crayon Group go up and down completely randomly.

Pair Corralation between Republic Bancorp and Crayon Group

Assuming the 90 days horizon Republic Bancorp is expected to under-perform the Crayon Group. But the stock apears to be less risky and, when comparing its historical volatility, Republic Bancorp is 1.82 times less risky than Crayon Group. The stock trades about -0.49 of its potential returns per unit of risk. The Crayon Group Holding is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  985.00  in Crayon Group Holding on October 14, 2024 and sell it today you would earn a total of  140.00  from holding Crayon Group Holding or generate 14.21% 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.  Crayon Group Holding

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.

Crayon Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crayon Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Crayon Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Republic Bancorp and Crayon Group

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

The idea behind Republic Bancorp and Crayon Group Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.