Correlation Between Cebu Air and Robinsons Retail
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Robinsons Retail 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 Cebu Air and Robinsons Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air Preferred and Robinsons Retail Holdings, you can compare the effects of market volatilities on Cebu Air and Robinsons Retail 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 Cebu Air with a short position of Robinsons Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Robinsons Retail.
Diversification Opportunities for Cebu Air and Robinsons Retail
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cebu and Robinsons is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air Preferred and Robinsons Retail Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinsons Retail Holdings and Cebu Air 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 Cebu Air Preferred are associated (or correlated) with Robinsons Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinsons Retail Holdings has no effect on the direction of Cebu Air i.e., Cebu Air and Robinsons Retail go up and down completely randomly.
Pair Corralation between Cebu Air and Robinsons Retail
Assuming the 90 days trading horizon Cebu Air Preferred is expected to generate 1.37 times more return on investment than Robinsons Retail. However, Cebu Air is 1.37 times more volatile than Robinsons Retail Holdings. It trades about -0.17 of its potential returns per unit of risk. Robinsons Retail Holdings is currently generating about -0.25 per unit of risk. If you would invest 3,900 in Cebu Air Preferred on August 29, 2024 and sell it today you would lose (250.00) from holding Cebu Air Preferred or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Cebu Air Preferred vs. Robinsons Retail Holdings
Performance |
| Timeline |
| Cebu Air Preferred |
| Robinsons Retail Holdings |
Cebu Air and Robinsons Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Robinsons Retail
The main advantage of trading using opposite Cebu Air and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Robinsons Retail 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 Robinsons Retail will offset losses from the drop in Robinsons Retail's long position.| Cebu Air vs. Allhome Corp | Cebu Air vs. Altus Property Ventures | Cebu Air vs. AgriNurture | Cebu Air vs. Wilcon Depot |
| Robinsons Retail vs. Manila Mining Corp | Robinsons Retail vs. Top Frontier Investment | Robinsons Retail vs. Atlas Consolidated Mining | Robinsons Retail vs. Converge Information Communications |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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