Correlation Between East West and Robinsons Retail
Can any of the company-specific risk be diversified away by investing in both East West 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 East West and Robinsons Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Banking and Robinsons Retail Holdings, you can compare the effects of market volatilities on East West 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 East West with a short position of Robinsons Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Robinsons Retail.
Diversification Opportunities for East West and Robinsons Retail
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between East and Robinsons is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking 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 East West 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 East West Banking 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 East West i.e., East West and Robinsons Retail go up and down completely randomly.
Pair Corralation between East West and Robinsons Retail
Assuming the 90 days trading horizon East West Banking is expected to generate 0.8 times more return on investment than Robinsons Retail. However, East West Banking is 1.25 times less risky than Robinsons Retail. It trades about 0.08 of its potential returns per unit of risk. Robinsons Retail Holdings is currently generating about -0.04 per unit of risk. If you would invest 675.00 in East West Banking on August 29, 2024 and sell it today you would earn a total of 301.00 from holding East West Banking or generate 44.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Banking vs. Robinsons Retail Holdings
Performance |
| Timeline |
| East West Banking |
| Robinsons Retail Holdings |
East West and Robinsons Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Robinsons Retail
The main advantage of trading using opposite East West and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West 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.| East West vs. Apex Mining Co | East West vs. Atlas Consolidated Mining | East West vs. Transpacific Broadband Group | East West vs. Philex Mining Corp |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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