Correlation Between Republic Bancorp and NESNVX

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

By analyzing existing cross correlation between Republic Bancorp and NESNVX 5 14 MAR 28, you can compare the effects of market volatilities on Republic Bancorp and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and NESNVX.

Diversification Opportunities for Republic Bancorp and NESNVX

0.51

Correlation Coefficient

Republic Bancorp  NESNVX

Very weak diversification

The 3 months correlation between Republic and NESNVX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and NESNVX 5 14 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 5 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 5 14 has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and NESNVX go up and down completely randomly.

Pair Corralation between Republic Bancorp and NESNVX

Assuming the 90 days horizon Republic Bancorp is expected to generate 3.9 times more return on investment than NESNVX. However, Republic Bancorp is 3.9 times more volatile than NESNVX 5 14 MAR 28. It trades about 0.07 of its potential returns per unit of risk. NESNVX 5 14 MAR 28 is currently generating about -0.01 per unit of risk. If you would invest  4,353  in Republic Bancorp on October 3, 2024 and sell it today you would earn a total of  2,634  from holding Republic Bancorp or generate 60.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.81%
Values	Daily Returns

Republic Bancorp  vs.  NESNVX 5 14 MAR 28

Republic Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Republic Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Republic Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

NESNVX 5 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 5 14 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX 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 NESNVX

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

The idea behind Republic Bancorp and NESNVX 5 14 MAR 28 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.