Correlation Between Republic Bancorp and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and CERo Therapeutics 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 CERo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Republic Bancorp and CERo Therapeutics Holdings, you can compare the effects of market volatilities on Republic Bancorp and CERo Therapeutics 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 CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and CERo Therapeutics.
Diversification Opportunities for Republic Bancorp and CERo Therapeutics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Republic and CERo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and CERo Therapeutics go up and down completely randomly.
Pair Corralation between Republic Bancorp and CERo Therapeutics
Assuming the 90 days horizon Republic Bancorp is expected to generate 0.06 times more return on investment than CERo Therapeutics. However, Republic Bancorp is 15.42 times less risky than CERo Therapeutics. It trades about -0.21 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about -0.02 per unit of risk. If you would invest 7,762 in Republic Bancorp on September 23, 2024 and sell it today you would lose (591.00) from holding Republic Bancorp or give up 7.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Republic Bancorp vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| Republic Bancorp |
| CERo Therapeutics |
Republic Bancorp and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Republic Bancorp and CERo Therapeutics
The main advantage of trading using opposite Republic Bancorp and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Bancorp position performs unexpectedly, CERo Therapeutics 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 CERo Therapeutics will offset losses from the drop in CERo Therapeutics' long position.| Republic Bancorp vs. First Community | Republic Bancorp vs. Community West Bancshares | Republic Bancorp vs. First Financial Northwest | Republic Bancorp vs. First Northwest Bancorp |
| CERo Therapeutics vs. Summit Therapeutics PLC | CERo Therapeutics vs. Inflection Point Acquisition | CERo Therapeutics vs. Mind Medicine | CERo Therapeutics vs. Ardelyx |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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