Correlation Between Jollibee Foods and Bright Kindle
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Bright Kindle 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 Bright Kindle 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 Bright Kindle Resources, you can compare the effects of market volatilities on Jollibee Foods and Bright Kindle 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 Bright Kindle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Bright Kindle.
Diversification Opportunities for Jollibee Foods and Bright Kindle
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jollibee and Bright is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Bright Kindle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Kindle Resources 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 Bright Kindle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Kindle Resources has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Bright Kindle go up and down completely randomly.
Pair Corralation between Jollibee Foods and Bright Kindle
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.49 times more return on investment than Bright Kindle. However, Jollibee Foods Corp is 2.05 times less risky than Bright Kindle. It trades about 0.01 of its potential returns per unit of risk. Bright Kindle Resources is currently generating about -0.08 per unit of risk. If you would invest 26,520 in Jollibee Foods Corp on August 25, 2024 and sell it today you would lose (20.00) from holding Jollibee Foods Corp or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Bright Kindle Resources
Performance |
| Timeline |
| Jollibee Foods Corp |
| Bright Kindle Resources |
Jollibee Foods and Bright Kindle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Bright Kindle
The main advantage of trading using opposite Jollibee Foods and Bright Kindle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Bright Kindle 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 Bright Kindle will offset losses from the drop in Bright Kindle's long position.| Jollibee Foods vs. Philex Mining Corp | Jollibee Foods vs. Apex Mining Co | Jollibee Foods vs. Converge Information Communications | Jollibee Foods vs. Atlas Consolidated Mining |
| Bright Kindle vs. Top Frontier Investment | Bright Kindle vs. Cebu Air Preferred | Bright Kindle vs. Converge Information Communications | Bright Kindle vs. Jollibee Foods Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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