Correlation Between Robinsons Retail and Oriental Petroleum
Can any of the company-specific risk be diversified away by investing in both Robinsons Retail and Oriental Petroleum 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 Robinsons Retail and Oriental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robinsons Retail Holdings and Oriental Petroleum and, you can compare the effects of market volatilities on Robinsons Retail and Oriental Petroleum 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 Robinsons Retail with a short position of Oriental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robinsons Retail and Oriental Petroleum.
Diversification Opportunities for Robinsons Retail and Oriental Petroleum
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Robinsons and Oriental is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Robinsons Retail Holdings and Oriental Petroleum and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Petroleum and and Robinsons Retail 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 Robinsons Retail Holdings are associated (or correlated) with Oriental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Petroleum and has no effect on the direction of Robinsons Retail i.e., Robinsons Retail and Oriental Petroleum go up and down completely randomly.
Pair Corralation between Robinsons Retail and Oriental Petroleum
Assuming the 90 days trading horizon Robinsons Retail Holdings is expected to generate 0.33 times more return on investment than Oriental Petroleum. However, Robinsons Retail Holdings is 3.01 times less risky than Oriental Petroleum. It trades about -0.28 of its potential returns per unit of risk. Oriental Petroleum and is currently generating about -0.18 per unit of risk. If you would invest 3,900 in Robinsons Retail Holdings on September 1, 2024 and sell it today you would lose (320.00) from holding Robinsons Retail Holdings or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Robinsons Retail Holdings vs. Oriental Petroleum and
Performance |
| Timeline |
| Robinsons Retail Holdings |
| Oriental Petroleum and |
Robinsons Retail and Oriental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robinsons Retail and Oriental Petroleum
The main advantage of trading using opposite Robinsons Retail and Oriental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robinsons Retail position performs unexpectedly, Oriental Petroleum 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 Oriental Petroleum will offset losses from the drop in Oriental Petroleum's long position.| Robinsons Retail vs. Top Frontier Investment | Robinsons Retail vs. Manila Mining Corp | Robinsons Retail vs. Premiere Entertainment | Robinsons Retail vs. Philex Mining Corp |
| Oriental Petroleum vs. Integrated Micro Electronics | Oriental Petroleum vs. Robinsons Retail Holdings | Oriental Petroleum vs. Century Pacific Food | Oriental Petroleum vs. Alliance Select Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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