Correlation Between TRUST BANK and REPUBLIC BANK
Can any of the company-specific risk be diversified away by investing in both TRUST BANK 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 TRUST BANK and REPUBLIC BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRUST BANK LIMITED and REPUBLIC BANK LIMITED, you can compare the effects of market volatilities on TRUST 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 TRUST BANK with a short position of REPUBLIC BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRUST BANK and REPUBLIC BANK.
Diversification Opportunities for TRUST BANK and REPUBLIC BANK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRUST and REPUBLIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRUST BANK 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 TRUST 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 TRUST BANK 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 TRUST BANK i.e., TRUST BANK and REPUBLIC BANK go up and down completely randomly.
Pair Corralation between TRUST BANK and REPUBLIC 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 |
TRUST BANK LIMITED vs. REPUBLIC BANK LIMITED
Performance |
| Timeline |
| TRUST BANK LIMITED |
| REPUBLIC BANK LIMITED |
TRUST BANK and REPUBLIC BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRUST BANK and REPUBLIC BANK
The main advantage of trading using opposite TRUST BANK and REPUBLIC BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRUST 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 TRUST BANK LIMITED 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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