Correlation Between Republic Bancorp and 446150AV6

Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and 446150AV6 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 446150AV6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Republic Bancorp and HBAN 445, you can compare the effects of market volatilities on Republic Bancorp and 446150AV6 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 446150AV6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and 446150AV6.

Diversification Opportunities for Republic Bancorp and 446150AV6

0.19

Correlation Coefficient

Republic Bancorp  446150AV6

Average diversification

The 3 months correlation between Republic and 446150AV6 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and HBAN 445 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 446150AV6 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 446150AV6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 446150AV6 has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and 446150AV6 go up and down completely randomly.

Pair Corralation between Republic Bancorp and 446150AV6

Assuming the 90 days horizon Republic Bancorp is expected to generate 0.46 times more return on investment than 446150AV6. However, Republic Bancorp is 2.17 times less risky than 446150AV6. It trades about -0.45 of its potential returns per unit of risk. HBAN 445 is currently generating about -0.21 per unit of risk. If you would invest  7,589  in Republic Bancorp on October 13, 2024 and sell it today you would lose (1,109) from holding Republic Bancorp or give up 14.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Republic Bancorp  vs.  HBAN 445

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.

446150AV6

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HBAN 445 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 446150AV6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Republic Bancorp and 446150AV6

The main advantage of trading using opposite Republic Bancorp and 446150AV6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Bancorp position performs unexpectedly, 446150AV6 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 446150AV6 will offset losses from the drop in 446150AV6's long position.

The idea behind Republic Bancorp and HBAN 445 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.