Correlation Between Jollibee Foods and China Overseas
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and China Overseas 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 Jollibee Foods and China Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jollibee Foods Corp and China Overseas Land, you can compare the effects of market volatilities on Jollibee Foods and China Overseas 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 Jollibee Foods with a short position of China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and China Overseas.
Diversification Opportunities for Jollibee Foods and China Overseas
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jollibee and China is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and Jollibee Foods 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 Jollibee Foods Corp are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and China Overseas go up and down completely randomly.
Pair Corralation between Jollibee Foods and China Overseas
Assuming the 90 days horizon Jollibee Foods Corp is expected to generate 0.54 times more return on investment than China Overseas. However, Jollibee Foods Corp is 1.84 times less risky than China Overseas. It trades about 0.02 of its potential returns per unit of risk. China Overseas Land is currently generating about 0.0 per unit of risk. If you would invest 1,711 in Jollibee Foods Corp on August 30, 2024 and sell it today you would earn a total of 114.00 from holding Jollibee Foods Corp or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.65% |
| Values | Daily Returns |
Jollibee Foods Corp vs. China Overseas Land
Performance |
| Timeline |
| Jollibee Foods Corp |
| China Overseas Land |
Jollibee Foods and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and China Overseas
The main advantage of trading using opposite Jollibee Foods and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| Jollibee Foods vs. McDonalds | Jollibee Foods vs. Starbucks | Jollibee Foods vs. Chipotle Mexican Grill | Jollibee Foods vs. Yum Brands |
| China Overseas vs. Longfor Group Holdings | China Overseas vs. Sun Hung Kai | China Overseas vs. Country Garden Holdings | China Overseas vs. Sino Land Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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