Correlation Between Balai Ni and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both Balai Ni and Jollibee Foods 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 Balai Ni and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balai Ni Fruitas and Jollibee Foods Corp, you can compare the effects of market volatilities on Balai Ni and Jollibee Foods 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 Balai Ni with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balai Ni and Jollibee Foods.
Diversification Opportunities for Balai Ni and Jollibee Foods
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Balai and Jollibee is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Balai Ni Fruitas and Jollibee Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jollibee Foods Corp and Balai Ni 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 Balai Ni Fruitas are associated (or correlated) with Jollibee Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jollibee Foods Corp has no effect on the direction of Balai Ni i.e., Balai Ni and Jollibee Foods go up and down completely randomly.
Pair Corralation between Balai Ni and Jollibee Foods
Assuming the 90 days trading horizon Balai Ni Fruitas is expected to generate 1.96 times more return on investment than Jollibee Foods. However, Balai Ni is 1.96 times more volatile than Jollibee Foods Corp. It trades about -0.02 of its potential returns per unit of risk. Jollibee Foods Corp is currently generating about -0.04 per unit of risk. If you would invest 39.00 in Balai Ni Fruitas on September 1, 2024 and sell it today you would lose (1.00) from holding Balai Ni Fruitas or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Balai Ni Fruitas vs. Jollibee Foods Corp
Performance |
| Timeline |
| Balai Ni Fruitas |
| Jollibee Foods Corp |
Balai Ni and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balai Ni and Jollibee Foods
The main advantage of trading using opposite Balai Ni and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balai Ni position performs unexpectedly, Jollibee Foods 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 Jollibee Foods will offset losses from the drop in Jollibee Foods' long position.| Balai Ni vs. Manila Mining Corp | Balai Ni vs. Philippine Savings Bank | Balai Ni vs. Jollibee Foods Corp | Balai Ni vs. Metro Retail Stores |
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Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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