Correlation Between Metro Retail and Robinsons Retail

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

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

Diversification Opportunities for Metro Retail and Robinsons Retail

-0.32

Correlation Coefficient

Metro Retail  Robinsons Retail

Very good diversification

The 3 months correlation between Metro and Robinsons is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores 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 Metro 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 Metro Retail Stores 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 Metro Retail i.e., Metro Retail and Robinsons Retail go up and down completely randomly.

Pair Corralation between Metro Retail and Robinsons Retail

Assuming the 90 days trading horizon Metro Retail Stores is expected to under-perform the Robinsons Retail. In addition to that, Metro Retail is 1.06 times more volatile than Robinsons Retail Holdings. It trades about -0.04 of its total potential returns per unit of risk. Robinsons Retail Holdings is currently generating about 0.07 per unit of volatility. If you would invest  3,579  in Robinsons Retail Holdings on March 31, 2025 and sell it today you would earn a total of  226.00  from holding Robinsons Retail Holdings or generate 6.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Metro Retail Stores  vs.  Robinsons Retail Holdings

Metro Retail Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metro Retail Stores has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metro Retail is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Robinsons Retail Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Robinsons Retail Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Robinsons Retail may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Metro Retail and Robinsons Retail

The main advantage of trading using opposite Metro Retail and Robinsons Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail 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 Metro Retail Stores 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.