Correlation Between Jollibee Foods and AgriNurture
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and AgriNurture 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 AgriNurture 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 AgriNurture, you can compare the effects of market volatilities on Jollibee Foods and AgriNurture 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 AgriNurture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and AgriNurture.
Diversification Opportunities for Jollibee Foods and AgriNurture
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jollibee and AgriNurture is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and AgriNurture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriNurture 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 AgriNurture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriNurture has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and AgriNurture go up and down completely randomly.
Pair Corralation between Jollibee Foods and AgriNurture
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.78 times more return on investment than AgriNurture. However, Jollibee Foods Corp is 1.28 times less risky than AgriNurture. It trades about 0.05 of its potential returns per unit of risk. AgriNurture is currently generating about -0.02 per unit of risk. If you would invest 26,718 in Jollibee Foods Corp on August 29, 2024 and sell it today you would earn a total of 442.00 from holding Jollibee Foods Corp or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. AgriNurture
Performance |
| Timeline |
| Jollibee Foods Corp |
| AgriNurture |
Jollibee Foods and AgriNurture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and AgriNurture
The main advantage of trading using opposite Jollibee Foods and AgriNurture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, AgriNurture 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 AgriNurture will offset losses from the drop in AgriNurture's long position.| Jollibee Foods vs. Atlas Consolidated Mining | Jollibee Foods vs. Top Frontier Investment | Jollibee Foods vs. Converge Information Communications | Jollibee Foods vs. Manila Mining Corp |
| AgriNurture vs. Lepanto Consolidated Mining | AgriNurture vs. Concepcion Industrial Corp | AgriNurture vs. Jollibee Foods Corp | AgriNurture vs. Metro Retail Stores |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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