Correlation Between BDO Unibank and Robinsons Retail

Can any of the company-specific risk be diversified away by investing in both BDO Unibank 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 BDO Unibank and Robinsons Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BDO Unibank and Robinsons Retail Holdings, you can compare the effects of market volatilities on BDO Unibank 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 BDO Unibank with a short position of Robinsons Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Robinsons Retail.

Diversification Opportunities for BDO Unibank and Robinsons Retail

0.76

Correlation Coefficient

BDO Unibank  Robinsons Retail

Poor diversification

The 3 months correlation between BDO and Robinsons is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank 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 BDO Unibank 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 BDO Unibank 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 BDO Unibank i.e., BDO Unibank and Robinsons Retail go up and down completely randomly.

Pair Corralation between BDO Unibank and Robinsons Retail

Assuming the 90 days trading horizon BDO Unibank is expected to generate 1.39 times more return on investment than Robinsons Retail. However, BDO Unibank is 1.39 times more volatile than Robinsons Retail Holdings. It trades about 0.06 of its potential returns per unit of risk. Robinsons Retail Holdings is currently generating about 0.03 per unit of risk. If you would invest  14,358  in BDO Unibank on December 30, 2024 and sell it today you would earn a total of  1,042  from holding BDO Unibank or generate 7.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BDO Unibank  vs.  Robinsons Retail Holdings

BDO Unibank

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BDO Unibank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, BDO Unibank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Robinsons Retail Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Robinsons Retail Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Robinsons Retail is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BDO Unibank and Robinsons Retail

The main advantage of trading using opposite BDO Unibank and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank 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.

The idea behind BDO Unibank and Robinsons Retail Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.