Correlation Between ECOBANK GHANA and REPUBLIC BANK
Can any of the company-specific risk be diversified away by investing in both ECOBANK GHANA and REPUBLIC BANK 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 ECOBANK GHANA and REPUBLIC BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECOBANK GHANA LIMITED and REPUBLIC BANK LIMITED, you can compare the effects of market volatilities on ECOBANK GHANA 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 ECOBANK GHANA with a short position of REPUBLIC BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECOBANK GHANA and REPUBLIC BANK.
Diversification Opportunities for ECOBANK GHANA and REPUBLIC BANK
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECOBANK and REPUBLIC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ECOBANK GHANA LIMITED 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 ECOBANK GHANA 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 ECOBANK GHANA LIMITED 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 ECOBANK GHANA i.e., ECOBANK GHANA and REPUBLIC BANK go up and down completely randomly.
Pair Corralation between ECOBANK GHANA and REPUBLIC BANK
Assuming the 90 days trading horizon ECOBANK GHANA is expected to generate 2.34 times less return on investment than REPUBLIC BANK. In addition to that, ECOBANK GHANA is 1.74 times more volatile than REPUBLIC BANK LIMITED. It trades about 0.01 of its total potential returns per unit of risk. REPUBLIC BANK LIMITED is currently generating about 0.02 per unit of volatility. If you would invest 60.00 in REPUBLIC BANK LIMITED on August 27, 2024 and sell it today you would earn a total of 6.00 from holding REPUBLIC BANK LIMITED or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECOBANK GHANA LIMITED vs. REPUBLIC BANK LIMITED
Performance |
| Timeline |
| ECOBANK GHANA LIMITED |
| REPUBLIC BANK LIMITED |
ECOBANK GHANA and REPUBLIC BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECOBANK GHANA and REPUBLIC BANK
The main advantage of trading using opposite ECOBANK GHANA and REPUBLIC BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECOBANK GHANA 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.| ECOBANK GHANA vs. TRUST BANK LIMITED | ECOBANK GHANA vs. AGRICULTURAL DEVELOPMENT BANK | ECOBANK GHANA vs. STANDARD CHARTERED BANK | ECOBANK GHANA vs. GUINNESS GHANA BREWERIES |
| REPUBLIC BANK vs. GUINNESS GHANA BREWERIES | REPUBLIC BANK vs. SAMBA FOODS LIMITED | REPUBLIC BANK vs. AGRICULTURAL DEVELOPMENT BANK | REPUBLIC BANK vs. SIC INSURANCE ANY |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |