Correlation Between Robinsons Retail and RFM Corp

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

Diversification Opportunities for Robinsons Retail and RFM Corp

0.41

Correlation Coefficient

Robinsons Retail  RFM Corp

Very weak diversification

The 3 months correlation between Robinsons and RFM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Robinsons Retail Holdings and RFM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFM 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 RFM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFM Corp has no effect on the direction of Robinsons Retail i.e., Robinsons Retail and RFM Corp go up and down completely randomly.

Pair Corralation between Robinsons Retail and RFM Corp

Assuming the 90 days trading horizon Robinsons Retail Holdings is expected to generate 1.53 times more return on investment than RFM Corp. However, Robinsons Retail is 1.53 times more volatile than RFM Corp. It trades about 0.06 of its potential returns per unit of risk. RFM Corp is currently generating about 0.02 per unit of risk. If you would invest  3,674  in Robinsons Retail Holdings on April 25, 2025 and sell it today you would earn a total of  196.00  from holding Robinsons Retail Holdings or generate 5.33% return on investment over 90 days.

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

Robinsons Retail Holdings  vs.  RFM Corp

Robinsons Retail Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Robinsons Retail Holdings are ranked lower than 4 (%) 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 August 2025.

RFM Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RFM Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, RFM Corp 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 RFM Corp

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

The idea behind Robinsons Retail Holdings and RFM 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.