Correlation Between BDO Unibank and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both BDO Unibank 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 BDO Unibank and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and Jollibee Foods Corp, you can compare the effects of market volatilities on BDO Unibank 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 BDO Unibank with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Jollibee Foods.
Diversification Opportunities for BDO Unibank and Jollibee Foods
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BDO and Jollibee is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank 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 BDO Unibank 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 BDO Unibank 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 BDO Unibank i.e., BDO Unibank and Jollibee Foods go up and down completely randomly.
Pair Corralation between BDO Unibank and Jollibee Foods
Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the Jollibee Foods. In addition to that, BDO Unibank is 1.2 times more volatile than Jollibee Foods Corp. It trades about -0.03 of its total potential returns per unit of risk. Jollibee Foods Corp is currently generating about -0.02 per unit of volatility. If you would invest 26,679 in Jollibee Foods Corp on August 31, 2024 and sell it today you would lose (559.00) from holding Jollibee Foods Corp or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank vs. Jollibee Foods Corp
Performance |
| Timeline |
| BDO Unibank |
| Jollibee Foods Corp |
BDO Unibank and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and Jollibee Foods
The main advantage of trading using opposite BDO Unibank and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank 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.| BDO Unibank vs. Metropolitan Bank Trust | BDO Unibank vs. Philippine National Bank | BDO Unibank vs. Asia United Bank | BDO Unibank vs. Philippine Savings Bank |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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