Correlation Between Security Bank and Robinsons Retail

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

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

Diversification Opportunities for Security Bank and Robinsons Retail

0.63

Correlation Coefficient

Security Bank  Robinsons Retail

Poor diversification

The 3 months correlation between Security and Robinsons is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp 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 Security Bank 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 Security Bank Corp 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 Security Bank i.e., Security Bank and Robinsons Retail go up and down completely randomly.

Pair Corralation between Security Bank and Robinsons Retail

Assuming the 90 days trading horizon Security Bank Corp is expected to generate 2.14 times more return on investment than Robinsons Retail. However, Security Bank is 2.14 times more volatile than Robinsons Retail Holdings. It trades about 0.09 of its potential returns per unit of risk. Robinsons Retail Holdings is currently generating about -0.13 per unit of risk. 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

Security Bank Corp  vs.  Robinsons Retail Holdings

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.

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 Security Bank and Robinsons Retail

The main advantage of trading using opposite Security Bank and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank 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 Security Bank Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.