Correlation Between CH Robinson and Royal Mail
Can any of the company-specific risk be diversified away by investing in both CH Robinson and Royal Mail 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 CH Robinson and Royal Mail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CH Robinson Worldwide and Royal Mail Plc, you can compare the effects of market volatilities on CH Robinson and Royal Mail 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 CH Robinson with a short position of Royal Mail. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Robinson and Royal Mail.
Diversification Opportunities for CH Robinson and Royal Mail
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHRW and Royal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CH Robinson Worldwide and Royal Mail Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Mail Plc and CH Robinson 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 CH Robinson Worldwide are associated (or correlated) with Royal Mail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Mail Plc has no effect on the direction of CH Robinson i.e., CH Robinson and Royal Mail go up and down completely randomly.
Pair Corralation between CH Robinson and Royal Mail
Given the investment horizon of 90 days CH Robinson is expected to generate 13.8 times less return on investment than Royal Mail. But when comparing it to its historical volatility, CH Robinson Worldwide is 1.76 times less risky than Royal Mail. It trades about 0.01 of its potential returns per unit of risk. Royal Mail Plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 279.00 in Royal Mail Plc on November 5, 2024 and sell it today you would earn a total of 105.00 from holding Royal Mail Plc or generate 37.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 36.64% |
| Values | Daily Returns |
CH Robinson Worldwide vs. Royal Mail Plc
Performance |
| Timeline |
| CH Robinson Worldwide |
| Royal Mail Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CH Robinson and Royal Mail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CH Robinson and Royal Mail
The main advantage of trading using opposite CH Robinson and Royal Mail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Robinson position performs unexpectedly, Royal Mail 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 Royal Mail will offset losses from the drop in Royal Mail's long position.| CH Robinson vs. JB Hunt Transport | CH Robinson vs. Landstar System | CH Robinson vs. Hub Group | CH Robinson vs. Forward Air |
| Royal Mail vs. Freightos Limited Ordinary | Royal Mail vs. Addentax Group Corp | Royal Mail vs. United Parcel Service | Royal Mail vs. GXO Logistics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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