Correlation Between Jollibee Foods and AyalaLand REIT
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and AyalaLand REIT 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 AyalaLand REIT 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 AyalaLand REIT, you can compare the effects of market volatilities on Jollibee Foods and AyalaLand REIT 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 AyalaLand REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and AyalaLand REIT.
Diversification Opportunities for Jollibee Foods and AyalaLand REIT
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jollibee and AyalaLand is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and AyalaLand REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AyalaLand REIT 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 AyalaLand REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AyalaLand REIT has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and AyalaLand REIT go up and down completely randomly.
Pair Corralation between Jollibee Foods and AyalaLand REIT
Assuming the 90 days trading horizon Jollibee Foods is expected to generate 1.01 times less return on investment than AyalaLand REIT. In addition to that, Jollibee Foods is 1.17 times more volatile than AyalaLand REIT. It trades about 0.03 of its total potential returns per unit of risk. AyalaLand REIT is currently generating about 0.04 per unit of volatility. If you would invest 3,100 in AyalaLand REIT on September 12, 2024 and sell it today you would earn a total of 695.00 from holding AyalaLand REIT or generate 22.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. AyalaLand REIT
Performance |
| Timeline |
| Jollibee Foods Corp |
| AyalaLand REIT |
Jollibee Foods and AyalaLand REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and AyalaLand REIT
The main advantage of trading using opposite Jollibee Foods and AyalaLand REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, AyalaLand REIT 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 AyalaLand REIT will offset losses from the drop in AyalaLand REIT's long position.| Jollibee Foods vs. Century Pacific Food | Jollibee Foods vs. Lepanto Consolidated Mining | Jollibee Foods vs. Cebu Air Preferred | Jollibee Foods vs. Converge Information Communications |
| AyalaLand REIT vs. Top Frontier Investment | AyalaLand REIT vs. Jollibee Foods Corp | AyalaLand REIT vs. Integrated Micro Electronics | AyalaLand REIT vs. National Reinsurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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