Correlation Between Globe Telecom and Robinsons Retail
Can any of the company-specific risk be diversified away by investing in both Globe Telecom 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 Globe Telecom and Robinsons Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Robinsons Retail Holdings, you can compare the effects of market volatilities on Globe Telecom 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 Globe Telecom with a short position of Robinsons Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Robinsons Retail.
Diversification Opportunities for Globe Telecom and Robinsons Retail
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Robinsons is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom 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 Globe Telecom 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 Globe Telecom 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 Globe Telecom i.e., Globe Telecom and Robinsons Retail go up and down completely randomly.
Pair Corralation between Globe Telecom and Robinsons Retail
Assuming the 90 days trading horizon Globe Telecom is expected to generate 1.31 times more return on investment than Robinsons Retail. However, Globe Telecom is 1.31 times more volatile than Robinsons Retail Holdings. It trades about 0.03 of its potential returns per unit of risk. Robinsons Retail Holdings is currently generating about -0.17 per unit of risk. If you would invest 223,945 in Globe Telecom on October 26, 2024 and sell it today you would earn a total of 6,055 from holding Globe Telecom or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Telecom vs. Robinsons Retail Holdings
Performance |
| Timeline |
| Globe Telecom |
| Robinsons Retail Holdings |
Globe Telecom and Robinsons Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Robinsons Retail
The main advantage of trading using opposite Globe Telecom and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom 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.| Globe Telecom vs. Transpacific Broadband Group | Globe Telecom vs. Apex Mining Co | Globe Telecom vs. Philippine Savings Bank | Globe Telecom vs. Manila Mining Corp |
| Robinsons Retail vs. Semirara Mining Corp | Robinsons Retail vs. Converge Information Communications | Robinsons Retail vs. House of Investments | Robinsons Retail vs. Metro Retail Stores |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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