Correlation Between REPUBLIC BANK and TRUST BANK
Can any of the company-specific risk be diversified away by investing in both REPUBLIC BANK and TRUST 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 REPUBLIC BANK and TRUST BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REPUBLIC BANK LIMITED and TRUST BANK LIMITED, you can compare the effects of market volatilities on REPUBLIC BANK and TRUST 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 REPUBLIC BANK with a short position of TRUST BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of REPUBLIC BANK and TRUST BANK.
Diversification Opportunities for REPUBLIC BANK and TRUST BANK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between REPUBLIC and TRUST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding REPUBLIC BANK LIMITED and TRUST BANK LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRUST BANK LIMITED and REPUBLIC 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 REPUBLIC BANK LIMITED are associated (or correlated) with TRUST BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRUST BANK LIMITED has no effect on the direction of REPUBLIC BANK i.e., REPUBLIC BANK and TRUST BANK go up and down completely randomly.
Pair Corralation between REPUBLIC BANK and TRUST BANK
If you would invest 55.00 in REPUBLIC BANK LIMITED on September 2, 2024 and sell it today you would earn a total of 11.00 from holding REPUBLIC BANK LIMITED or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REPUBLIC BANK LIMITED vs. TRUST BANK LIMITED
Performance |
| Timeline |
| REPUBLIC BANK LIMITED |
| TRUST BANK LIMITED |
REPUBLIC BANK and TRUST BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REPUBLIC BANK and TRUST BANK
The main advantage of trading using opposite REPUBLIC BANK and TRUST BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REPUBLIC BANK position performs unexpectedly, TRUST 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 TRUST BANK will offset losses from the drop in TRUST BANK's long position.The idea behind REPUBLIC BANK LIMITED and TRUST 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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