Correlation Between Republic Bancorp and U1566PAD7

Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and U1566PAD7 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 U1566PAD7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Republic Bancorp and LUMN 45 15 JAN 29, you can compare the effects of market volatilities on Republic Bancorp and U1566PAD7 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 U1566PAD7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and U1566PAD7.

Diversification Opportunities for Republic Bancorp and U1566PAD7

0.82

Correlation Coefficient

Republic Bancorp  U1566PAD7

Very poor diversification

The 3 months correlation between Republic and U1566PAD7 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and LUMN 45 15 JAN 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMN 45 15 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 U1566PAD7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMN 45 15 has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and U1566PAD7 go up and down completely randomly.

Pair Corralation between Republic Bancorp and U1566PAD7

Assuming the 90 days horizon Republic Bancorp is expected to generate 6.05 times less return on investment than U1566PAD7. But when comparing it to its historical volatility, Republic Bancorp is 4.26 times less risky than U1566PAD7. It trades about 0.08 of its potential returns per unit of risk. LUMN 45 15 JAN 29 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,598  in LUMN 45 15 JAN 29 on September 28, 2024 and sell it today you would earn a total of  2,552  from holding LUMN 45 15 JAN 29 or generate 98.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	42.01%
Values	Daily Returns

Republic Bancorp  vs.  LUMN 45 15 JAN 29

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.

LUMN 45 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LUMN 45 15 JAN 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat 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 LUMN 45 15 JAN 29 investors.

Pair Trading with Republic Bancorp and U1566PAD7

The main advantage of trading using opposite Republic Bancorp and U1566PAD7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Bancorp position performs unexpectedly, U1566PAD7 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 U1566PAD7 will offset losses from the drop in U1566PAD7's long position.

The idea behind Republic Bancorp and LUMN 45 15 JAN 29 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.