Correlation Between Republic Bancorp and Trio Tech
Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and Trio Tech 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 Trio Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Republic Bancorp and Trio Tech International, you can compare the effects of market volatilities on Republic Bancorp and Trio Tech 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 Trio Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and Trio Tech.
Diversification Opportunities for Republic Bancorp and Trio Tech
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Republic and Trio is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and Trio Tech go up and down completely randomly.
Pair Corralation between Republic Bancorp and Trio Tech
Assuming the 90 days horizon Republic Bancorp is expected to generate 0.82 times more return on investment than Trio Tech. However, Republic Bancorp is 1.21 times less risky than Trio Tech. It trades about -0.21 of its potential returns per unit of risk. Trio Tech International is currently generating about -0.23 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Republic Bancorp vs. Trio Tech International
Performance |
| Timeline |
| Republic Bancorp |
| Trio Tech International |
Republic Bancorp and Trio Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Republic Bancorp and Trio Tech
The main advantage of trading using opposite Republic Bancorp and Trio Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Bancorp position performs unexpectedly, Trio Tech 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 Trio Tech will offset losses from the drop in Trio Tech's 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 |
| Trio Tech vs. Aehr Test Systems | Trio Tech vs. Camtek | Trio Tech vs. Nova | Trio Tech vs. Axcelis Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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