Correlation Between Lepanto Consolidated and Robinsons Retail

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

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

Diversification Opportunities for Lepanto Consolidated and Robinsons Retail

-0.07

Correlation Coefficient

Lepanto Consolidated  Robinsons Retail

Good diversification

The 3 months correlation between Lepanto and Robinsons is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining 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 Lepanto Consolidated 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 Lepanto Consolidated Mining 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 Lepanto Consolidated i.e., Lepanto Consolidated and Robinsons Retail go up and down completely randomly.

Pair Corralation between Lepanto Consolidated and Robinsons Retail

Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the Robinsons Retail. In addition to that, Lepanto Consolidated is 3.24 times more volatile than Robinsons Retail Holdings. It trades about -0.01 of its total potential returns per unit of risk. Robinsons Retail Holdings is currently generating about 0.02 per unit of volatility. If you would invest  3,565  in Robinsons Retail Holdings on September 23, 2024 and sell it today you would earn a total of  105.00  from holding Robinsons Retail Holdings or generate 2.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.37%
Values	Daily Returns

Lepanto Consolidated Mining  vs.  Robinsons Retail Holdings

Lepanto Consolidated

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lepanto Consolidated Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Lepanto Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain 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 Lepanto Consolidated and Robinsons Retail

The main advantage of trading using opposite Lepanto Consolidated and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated 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 Lepanto Consolidated Mining 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.