Correlation Between Robinsons Retail and Security Bank

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

Diversification Opportunities for Robinsons Retail and Security Bank

0.63

Correlation Coefficient

Robinsons Retail  Security Bank

Poor diversification

The 3 months correlation between Robinsons and Security is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Robinsons Retail Holdings and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank 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 Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Robinsons Retail i.e., Robinsons Retail and Security Bank go up and down completely randomly.

Pair Corralation between Robinsons Retail and Security Bank

Assuming the 90 days trading horizon Robinsons Retail Holdings is expected to under-perform the Security Bank. But the stock apears to be less risky and, when comparing its historical volatility, Robinsons Retail Holdings is 2.14 times less risky than Security Bank. The stock trades about -0.13 of its potential returns per unit of risk. The Security Bank Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,595  in Security Bank Corp on September 17, 2024 and sell it today you would earn a total of  1,095  from holding Security Bank Corp or generate 14.42% return on investment over 90 days.

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

Robinsons Retail Holdings  vs.  Security Bank 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 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.

Security Bank Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Security Bank Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Security Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robinsons Retail and Security Bank

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

The idea behind Robinsons Retail Holdings and Security Bank 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.