Correlation Between KKR Co and Republic Bancorp

Can any of the company-specific risk be diversified away by investing in both KKR Co and Republic Bancorp 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 KKR Co and Republic Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KKR Co LP and Republic Bancorp, you can compare the effects of market volatilities on KKR Co and Republic Bancorp 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 KKR Co with a short position of Republic Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Republic Bancorp.

Diversification Opportunities for KKR Co and Republic Bancorp

0.96

Correlation Coefficient

KKR Co  Republic Bancorp

Almost no diversification

The 3 months correlation between KKR and Republic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Republic Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic Bancorp and KKR Co 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 KKR Co LP are associated (or correlated) with Republic Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Bancorp has no effect on the direction of KKR Co i.e., KKR Co and Republic Bancorp go up and down completely randomly.

Pair Corralation between KKR Co and Republic Bancorp

Considering the 90-day investment horizon KKR Co is expected to generate 1.16 times less return on investment than Republic Bancorp. But when comparing it to its historical volatility, KKR Co LP is 1.26 times less risky than Republic Bancorp. It trades about 0.09 of its potential returns per unit of risk. Republic Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,345  in Republic Bancorp on September 24, 2024 and sell it today you would earn a total of  826.00  from holding Republic Bancorp or generate 13.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

KKR Co LP  vs.  Republic Bancorp

KKR Co LP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KKR Co LP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, KKR Co may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Republic Bancorp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Republic Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Republic Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KKR Co and Republic Bancorp

The main advantage of trading using opposite KKR Co and Republic Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Republic Bancorp 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 Bancorp will offset losses from the drop in Republic Bancorp's long position.

The idea behind KKR Co LP and Republic Bancorp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.