Correlation Between Jollibee Foods and Cebu Landmasters
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Cebu Landmasters 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 Cebu Landmasters 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 Cebu Landmasters, you can compare the effects of market volatilities on Jollibee Foods and Cebu Landmasters 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 Cebu Landmasters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Cebu Landmasters.
Diversification Opportunities for Jollibee Foods and Cebu Landmasters
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jollibee and Cebu is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Cebu Landmasters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Landmasters 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 Cebu Landmasters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Landmasters has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Cebu Landmasters go up and down completely randomly.
Pair Corralation between Jollibee Foods and Cebu Landmasters
Assuming the 90 days trading horizon Jollibee Foods is expected to generate 1.1 times less return on investment than Cebu Landmasters. In addition to that, Jollibee Foods is 1.35 times more volatile than Cebu Landmasters. It trades about 0.02 of its total potential returns per unit of risk. Cebu Landmasters is currently generating about 0.03 per unit of volatility. If you would invest 244.00 in Cebu Landmasters on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Cebu Landmasters or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Cebu Landmasters
Performance |
| Timeline |
| Jollibee Foods Corp |
| Cebu Landmasters |
Jollibee Foods and Cebu Landmasters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Cebu Landmasters
The main advantage of trading using opposite Jollibee Foods and Cebu Landmasters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Cebu Landmasters 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 Cebu Landmasters will offset losses from the drop in Cebu Landmasters' 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 |
| Cebu Landmasters vs. Philex Mining Corp | Cebu Landmasters vs. COL Financial Group | Cebu Landmasters vs. Bank of the | Cebu Landmasters vs. Transpacific Broadband Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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