Correlation Between REPUBLIC BANK and STANDARD CHARTERED

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

Diversification Opportunities for REPUBLIC BANK and STANDARD CHARTERED

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between REPUBLIC and STANDARD is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding REPUBLIC BANK LIMITED and STANDARD CHARTERED BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANDARD CHARTERED BANK 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 STANDARD CHARTERED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANDARD CHARTERED BANK has no effect on the direction of REPUBLIC BANK i.e., REPUBLIC BANK and STANDARD CHARTERED go up and down completely randomly.

Pair Corralation between REPUBLIC BANK and STANDARD CHARTERED

Assuming the 90 days trading horizon REPUBLIC BANK LIMITED is expected to generate 1.25 times more return on investment than STANDARD CHARTERED. However, REPUBLIC BANK is 1.25 times more volatile than STANDARD CHARTERED BANK. It trades about 0.18 of its potential returns per unit of risk. STANDARD CHARTERED BANK is currently generating about 0.16 per unit of risk. 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 Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

REPUBLIC BANK LIMITED  vs.  STANDARD CHARTERED BANK

 Performance 
       Timeline  
REPUBLIC BANK LIMITED 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
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.
STANDARD CHARTERED BANK 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in STANDARD CHARTERED BANK are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, STANDARD CHARTERED exhibited solid returns over the last few months and may actually be approaching a breakup point.

REPUBLIC BANK and STANDARD CHARTERED Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with REPUBLIC BANK and STANDARD CHARTERED

The main advantage of trading using opposite REPUBLIC BANK and STANDARD CHARTERED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REPUBLIC BANK position performs unexpectedly, STANDARD CHARTERED 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 STANDARD CHARTERED will offset losses from the drop in STANDARD CHARTERED's long position.
The idea behind REPUBLIC BANK LIMITED and STANDARD CHARTERED 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 Stocks Directory module to find actively traded stocks across global markets.

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