Correlation Between Jollibee Foods and Berjaya Philippines
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Berjaya Philippines 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 Berjaya Philippines 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 Berjaya Philippines, you can compare the effects of market volatilities on Jollibee Foods and Berjaya Philippines 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 Berjaya Philippines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Berjaya Philippines.
Diversification Opportunities for Jollibee Foods and Berjaya Philippines
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jollibee and Berjaya is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Berjaya Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berjaya Philippines 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 Berjaya Philippines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berjaya Philippines has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Berjaya Philippines go up and down completely randomly.
Pair Corralation between Jollibee Foods and Berjaya Philippines
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.16 times more return on investment than Berjaya Philippines. However, Jollibee Foods Corp is 6.3 times less risky than Berjaya Philippines. It trades about -0.26 of its potential returns per unit of risk. Berjaya Philippines is currently generating about -0.26 per unit of risk. If you would invest 26,280 in Jollibee Foods Corp on October 25, 2024 and sell it today you would lose (1,780) from holding Jollibee Foods Corp or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.82% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Berjaya Philippines
Performance |
| Timeline |
| Jollibee Foods Corp |
| Berjaya Philippines |
Jollibee Foods and Berjaya Philippines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Berjaya Philippines
The main advantage of trading using opposite Jollibee Foods and Berjaya Philippines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Berjaya Philippines 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 Berjaya Philippines will offset losses from the drop in Berjaya Philippines' long position.| Jollibee Foods vs. Philippine Savings Bank | Jollibee Foods vs. Security Bank Corp | Jollibee Foods vs. Top Frontier Investment | Jollibee Foods vs. Allhome Corp |
| Berjaya Philippines vs. East West Banking | Berjaya Philippines vs. Asia United Bank | Berjaya Philippines vs. Jollibee Foods Corp | Berjaya Philippines vs. Crown Asia Chemicals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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