Correlation Between Robinsons Retail and EEI Corp

Can any of the company-specific risk be diversified away by investing in both Robinsons Retail and EEI Corp 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 EEI Corp 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 EEI Corp, you can compare the effects of market volatilities on Robinsons Retail and EEI Corp 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 EEI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robinsons Retail and EEI Corp.

Diversification Opportunities for Robinsons Retail and EEI Corp

0.88

Correlation Coefficient

Robinsons Retail  EEI Corp

Very poor diversification

The 3 months correlation between Robinsons and EEI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Robinsons Retail Holdings and EEI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EEI Corp 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 EEI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EEI Corp has no effect on the direction of Robinsons Retail i.e., Robinsons Retail and EEI Corp go up and down completely randomly.

Pair Corralation between Robinsons Retail and EEI Corp

Assuming the 90 days trading horizon Robinsons Retail Holdings is expected to under-perform the EEI Corp. But the stock apears to be less risky and, when comparing its historical volatility, Robinsons Retail Holdings is 1.92 times less risky than EEI Corp. The stock trades about -0.18 of its potential returns per unit of risk. The EEI Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  412.00  in EEI Corp on October 10, 2024 and sell it today you would lose (54.00) from holding EEI Corp or give up 13.11% of portfolio value over 90 days.

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

Robinsons Retail Holdings  vs.  EEI Corp

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

EEI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EEI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Robinsons Retail and EEI Corp

The main advantage of trading using opposite Robinsons Retail and EEI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robinsons Retail position performs unexpectedly, EEI Corp 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 EEI Corp will offset losses from the drop in EEI Corp's long position.

The idea behind Robinsons Retail Holdings and EEI Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.