Correlation Between Royal Mail and CH Robinson
Can any of the company-specific risk be diversified away by investing in both Royal Mail and CH Robinson 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 Royal Mail and CH Robinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Mail PLC and CH Robinson Worldwide, you can compare the effects of market volatilities on Royal Mail and CH Robinson 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 Royal Mail with a short position of CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Mail and CH Robinson.
Diversification Opportunities for Royal Mail and CH Robinson
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and CHRW is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Royal Mail PLC and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide and Royal Mail 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 Royal Mail PLC are associated (or correlated) with CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of Royal Mail i.e., Royal Mail and CH Robinson go up and down completely randomly.
Pair Corralation between Royal Mail and CH Robinson
Assuming the 90 days horizon Royal Mail PLC is expected to under-perform the CH Robinson. But the pink sheet apears to be less risky and, when comparing its historical volatility, Royal Mail PLC is 5.84 times less risky than CH Robinson. The pink sheet trades about -0.26 of its potential returns per unit of risk. The CH Robinson Worldwide is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 10,894 in CH Robinson Worldwide on August 28, 2024 and sell it today you would lose (140.00) from holding CH Robinson Worldwide or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Mail PLC vs. CH Robinson Worldwide
Performance |
| Timeline |
| Royal Mail PLC |
| CH Robinson Worldwide |
Royal Mail and CH Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Mail and CH Robinson
The main advantage of trading using opposite Royal Mail and CH Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Mail position performs unexpectedly, CH Robinson 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 CH Robinson will offset losses from the drop in CH Robinson's long position.| Royal Mail vs. Kuehne Nagel International | Royal Mail vs. United Parcel Service | Royal Mail vs. FedEx | Royal Mail vs. GXO Logistics |
| CH Robinson vs. JB Hunt Transport | CH Robinson vs. Landstar System | CH Robinson vs. Hub Group | CH Robinson vs. Forward Air |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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