Correlation Between Integrated Micro and Robinsons Retail

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

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

Diversification Opportunities for Integrated Micro and Robinsons Retail

0.79

Correlation Coefficient

Integrated Micro  Robinsons Retail

Poor diversification

The 3 months correlation between Integrated and Robinsons is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics 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 Integrated Micro 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 Integrated Micro Electronics 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 Integrated Micro i.e., Integrated Micro and Robinsons Retail go up and down completely randomly.

Pair Corralation between Integrated Micro and Robinsons Retail

Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Robinsons Retail. In addition to that, Integrated Micro is 1.87 times more volatile than Robinsons Retail Holdings. It trades about -0.04 of its total potential returns per unit of risk. Robinsons Retail Holdings is currently generating about -0.07 per unit of volatility. If you would invest  3,830  in Robinsons Retail Holdings on September 3, 2024 and sell it today you would lose (250.00) from holding Robinsons Retail Holdings or give up 6.53% of portfolio value over 90 days.

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

Integrated Micro Electronics  vs.  Robinsons Retail Holdings

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Micro Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 comparatively stable basic indicators, Robinsons Retail is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Integrated Micro and Robinsons Retail

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

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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.