Correlation Between Robinsons Retail and PLDT

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

Diversification Opportunities for Robinsons Retail and PLDT

0.3

Correlation Coefficient

Robinsons Retail  PLDT

Weak diversification

The 3 months correlation between Robinsons and PLDT is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Robinsons Retail Holdings and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of Robinsons Retail i.e., Robinsons Retail and PLDT go up and down completely randomly.

Pair Corralation between Robinsons Retail and PLDT

Assuming the 90 days trading horizon Robinsons Retail Holdings is expected to generate 1.11 times more return on investment than PLDT. However, Robinsons Retail is 1.11 times more volatile than PLDT Inc. It trades about 0.03 of its potential returns per unit of risk. PLDT Inc is currently generating about -0.02 per unit of risk. If you would invest  3,630  in Robinsons Retail Holdings on December 3, 2024 and sell it today you would earn a total of  80.00  from holding Robinsons Retail Holdings or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Robinsons Retail Holdings  vs.  PLDT Inc

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

PLDT Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLDT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PLDT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Robinsons Retail and PLDT

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

The idea behind Robinsons Retail Holdings and PLDT Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .