Correlation Between Jollibee Foods and Papa Johns
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Papa Johns 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 Papa Johns 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 Papa Johns International, you can compare the effects of market volatilities on Jollibee Foods and Papa Johns 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 Papa Johns. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Papa Johns.
Diversification Opportunities for Jollibee Foods and Papa Johns
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jollibee and Papa is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Papa Johns International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papa Johns International 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 Papa Johns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papa Johns International has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Papa Johns go up and down completely randomly.
Pair Corralation between Jollibee Foods and Papa Johns
Assuming the 90 days horizon Jollibee Foods Corp is expected to generate 1.15 times more return on investment than Papa Johns. However, Jollibee Foods is 1.15 times more volatile than Papa Johns International. It trades about 0.03 of its potential returns per unit of risk. Papa Johns International is currently generating about -0.07 per unit of risk. If you would invest 1,762 in Jollibee Foods Corp on September 14, 2024 and sell it today you would earn a total of 212.00 from holding Jollibee Foods Corp or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.16% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Papa Johns International
Performance |
| Timeline |
| Jollibee Foods Corp |
| Papa Johns International |
Jollibee Foods and Papa Johns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Papa Johns
The main advantage of trading using opposite Jollibee Foods and Papa Johns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Papa Johns 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 Papa Johns will offset losses from the drop in Papa Johns' long position.| Jollibee Foods vs. Nathans Famous | Jollibee Foods vs. Good Times Restaurants | Jollibee Foods vs. McDonalds Holdings | Jollibee Foods vs. Compass Group PLC |
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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