Correlation Between ACCESS BANK and REPUBLIC BANK
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By analyzing existing cross correlation between ACCESS BANK GHANA and REPUBLIC BANK LIMITED, you can compare the effects of market volatilities on ACCESS BANK and REPUBLIC BANK 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 ACCESS BANK with a short position of REPUBLIC BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCESS BANK and REPUBLIC BANK.
Diversification Opportunities for ACCESS BANK and REPUBLIC BANK
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ACCESS and REPUBLIC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ACCESS BANK GHANA and REPUBLIC BANK LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REPUBLIC BANK LIMITED and ACCESS BANK 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 ACCESS BANK GHANA are associated (or correlated) with REPUBLIC BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REPUBLIC BANK LIMITED has no effect on the direction of ACCESS BANK i.e., ACCESS BANK and REPUBLIC BANK go up and down completely randomly.
Pair Corralation between ACCESS BANK and REPUBLIC BANK
Assuming the 90 days trading horizon ACCESS BANK GHANA is expected to under-perform the REPUBLIC BANK. But the stock apears to be less risky and, when comparing its historical volatility, ACCESS BANK GHANA is 1.18 times less risky than REPUBLIC BANK. The stock trades about 0.0 of its potential returns per unit of risk. The REPUBLIC BANK LIMITED is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 48.00 in REPUBLIC BANK LIMITED on September 2, 2024 and sell it today you would earn a total of 18.00 from holding REPUBLIC BANK LIMITED or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACCESS BANK GHANA vs. REPUBLIC BANK LIMITED
Performance |
| Timeline |
| ACCESS BANK GHANA |
| REPUBLIC BANK LIMITED |
ACCESS BANK and REPUBLIC BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACCESS BANK and REPUBLIC BANK
The main advantage of trading using opposite ACCESS BANK and REPUBLIC BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCESS BANK position performs unexpectedly, REPUBLIC BANK 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 REPUBLIC BANK will offset losses from the drop in REPUBLIC BANK's long position.The idea behind ACCESS BANK GHANA and REPUBLIC BANK LIMITED 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.Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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