Correlation Between Concepcion Industrial and Robinsons Retail

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

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

Diversification Opportunities for Concepcion Industrial and Robinsons Retail

0.82

Correlation Coefficient

Concepcion Industrial  Robinsons Retail

Very poor diversification

The 3 months correlation between Concepcion and Robinsons is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp 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 Concepcion Industrial 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 Concepcion Industrial Corp 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 Concepcion Industrial i.e., Concepcion Industrial and Robinsons Retail go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Robinsons Retail

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 1.44 times more return on investment than Robinsons Retail. However, Concepcion Industrial is 1.44 times more volatile than Robinsons Retail Holdings. It trades about 0.0 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  1,485  in Concepcion Industrial Corp on October 3, 2024 and sell it today you would lose (147.00) from holding Concepcion Industrial Corp or give up 9.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	82.11%
Values	Daily Returns

Concepcion Industrial Corp  vs.  Robinsons Retail Holdings

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Robinsons Retail Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robinsons Retail Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Concepcion Industrial and Robinsons Retail

The main advantage of trading using opposite Concepcion Industrial and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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 Concepcion Industrial Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.