Correlation Between Bright Kindle and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both Bright Kindle 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 Bright Kindle and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Kindle Resources and Jollibee Foods Corp, you can compare the effects of market volatilities on Bright Kindle 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 Bright Kindle with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Kindle and Jollibee Foods.
Diversification Opportunities for Bright Kindle and Jollibee Foods
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and Jollibee is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bright Kindle Resources 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 Bright Kindle 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 Bright Kindle Resources 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 Bright Kindle i.e., Bright Kindle and Jollibee Foods go up and down completely randomly.
Pair Corralation between Bright Kindle and Jollibee Foods
Assuming the 90 days trading horizon Bright Kindle Resources is expected to under-perform the Jollibee Foods. In addition to that, Bright Kindle is 2.45 times more volatile than Jollibee Foods Corp. It trades about -0.02 of its total potential returns per unit of risk. Jollibee Foods Corp is currently generating about 0.04 per unit of volatility. If you would invest 22,119 in Jollibee Foods Corp on August 29, 2024 and sell it today you would earn a total of 5,041 from holding Jollibee Foods Corp or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.82% |
| Values | Daily Returns |
Bright Kindle Resources vs. Jollibee Foods Corp
Performance |
| Timeline |
| Bright Kindle Resources |
| Jollibee Foods Corp |
Bright Kindle and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Kindle and Jollibee Foods
The main advantage of trading using opposite Bright Kindle and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Kindle 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.| Bright Kindle vs. Allhome Corp | Bright Kindle vs. Jollibee Foods Corp | Bright Kindle vs. LFM Properties Corp | Bright Kindle vs. PXP Energy Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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