Correlation Between REPUBLIC BANK and AGRICULTURAL DEVELOPMENT

Can any of the company-specific risk be diversified away by investing in both REPUBLIC BANK and AGRICULTURAL DEVELOPMENT 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 AGRICULTURAL DEVELOPMENT 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 AGRICULTURAL DEVELOPMENT BANK, you can compare the effects of market volatilities on REPUBLIC BANK and AGRICULTURAL DEVELOPMENT 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 AGRICULTURAL DEVELOPMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of REPUBLIC BANK and AGRICULTURAL DEVELOPMENT.

Diversification Opportunities for REPUBLIC BANK and AGRICULTURAL DEVELOPMENT

0.0

Correlation Coefficient

REPUBLIC BANK  AGRICULTURAL DEVELOPMENT

Pay attention - limited upside

The 3 months correlation between REPUBLIC and AGRICULTURAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding REPUBLIC BANK LIMITED and AGRICULTURAL DEVELOPMENT BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTURAL DEVELOPMENT 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 AGRICULTURAL DEVELOPMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTURAL DEVELOPMENT has no effect on the direction of REPUBLIC BANK i.e., REPUBLIC BANK and AGRICULTURAL DEVELOPMENT go up and down completely randomly.

Pair Corralation between REPUBLIC BANK and AGRICULTURAL DEVELOPMENT

If you would invest  55.00  in REPUBLIC BANK LIMITED on September 12, 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.  AGRICULTURAL DEVELOPMENT BANK

REPUBLIC BANK LIMITED

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REPUBLIC BANK LIMITED are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, REPUBLIC BANK unveiled solid returns over the last few months and may actually be approaching a breakup point.

AGRICULTURAL DEVELOPMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGRICULTURAL DEVELOPMENT BANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AGRICULTURAL DEVELOPMENT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with REPUBLIC BANK and AGRICULTURAL DEVELOPMENT

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

The idea behind REPUBLIC BANK LIMITED and AGRICULTURAL DEVELOPMENT BANK 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.